Will Monetary Incentive Improve UGC Contribution? The Case of Motivation and Competition Crowding Out

Project: Research

View graph of relations


User-generated content becomes more and more essential in people’s daily life, or forknowledge sharing/management in a business organization. To encourage contentcontribution, monetary incentives are often introduced. It is also found, however, thatintroducing monetary incentive may discourage contribution in some scenarios, forexample, blood donation. How does monetary incentive impact the user-generatedcontent contribution, then? We build a theoretical model studying user-generatedcontent (UGC) contribution, where four types of contributors (classified by whether theyare intrinsically-motivated and whether they produce content efficiently) compete foraudience attention. Based on whether the monetary incentive positively or negativelymodifies each type of contributor’s intrinsic motivation, as well as amount of themonetary incentive, we find that the introduction of monetary incentive creates differentlevels of competition among the contributors, and may either attract in or drive outcertain contributors. For example, it may drive out contributors who view monetaryincentives as a damage to his/her personal image (motivation crowding out). While itmay attract contributors who are interested in the monetary payment, this increasedcompetition also reduces attention received by other contributors who are not interestedin monetary incentives (competition crowding out.) Accordingly, it can either reduce orincrease the total contribution in the market. We also discuss how the quality andquantity of content contribution are affected differently by monetary incentives.Understanding this, we offer guidelines for the market maker to design better monetaryincentive schemes. Depending on the desired quality or quantity of the content level, themarket maker needs to offer appropriate level of monetary incentives to encouragecontent contribution.


Project number9042411
Grant typeGRF
Effective start/end date1/01/173/06/20

    Research areas

  • User Generated Content , Monetary Incentives , Crowding Out , Crowd in , Competition