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Financial Incentives Dampen Altruism in Online Prosocial Contributions: A Study of Online Reviews

Author

Listed:
  • Dandan Qiao

    (Department of Information Systems and Analytics, National University of Singapore, Singapore 117417)

  • Shun-Yang Lee

    (D’Amore-McKim School of Business, Northeastern University, Boston, Massachusetts 02115)

  • Andrew B. Whinston

    (McCombs School of Business, The University of Texas at Austin, Austin, Texas 78705)

  • Qiang Wei

    (School of Economics and Management, Tsinghua University, Beijing 100084, China)

Abstract
Many online platforms, such as review communities, rely on crowds’ voluntary altruistic contributions. Some platforms attempt to provide financial incentives to encourage users to contribute. Although past studies have demonstrated that monetary rewards can negatively affect individuals’ incentivized contributions, little is known about whether this effect spills over into individuals’ subsequent unincentivized prosocial activities. Our paper aims to bridge this gap by studying the potential spillover effect of financial incentives on subsequent prosocial contributions based on self-determination theory. Specifically, we conduct empirical analyses of a large Amazon review data set and use machine learning methods to identify reviewers who have received financial incentives. The econometric analyses show that the receipt of financial incentives has a significant spillover effect on reviewers’ subsequent unincentivized reviews, which tend to have a more positive sentiment, and the reviewers tend to reduce the review length and exert less linguistic effort in writing them. We conduct a series of robustness checks and find consistent results. We also study how the spillover effects differ based on the product type (i.e., search goods versus experience goods), incentive experience, prosocial experience, and reviewer quality, and we explore the within-product spillover effect. These findings advance the understanding of the interplay between financial incentives and prosocial behaviors and provide important managerial implications for platforms that hope to motivate users’ prosocial contributions.

Suggested Citation

  • Dandan Qiao & Shun-Yang Lee & Andrew B. Whinston & Qiang Wei, 2020. "Financial Incentives Dampen Altruism in Online Prosocial Contributions: A Study of Online Reviews," Information Systems Research, INFORMS, vol. 31(4), pages 1361-1375, December.
    • Handle: RePEc:inm:orisre:v:31:y:2020:i:4:p:1361-1375
    DOI: 10.1287/isre.2020.0949
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    References listed on IDEAS

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