Title: Spillover Effects of Financial Incentives on User Engagement: Evidence from an Online Knowledge Exchange Platform

Journal of Management Information Systems, forthcoming

Abstract

Online knowledge exchange platforms have become an important IT artifact that empowers online learning for the Internet users. A key challenge for knowledge exchange platforms is how to motivate the desirable user engagement behaviors. Based on the motivation theory and the equity theory, we propose a set of hypotheses regarding the spillover effects of financial incentives on three types of desirable yet non-incentivized user engagement, namely, voluntary knowledge sharing, knowledge seeking, and social engagement. We obtain an archival data set from a major online knowledge exchange platform (Zhihu.com) to evaluate our hypotheses. Leveraging a quasi-natural experiment wherein the platform implemented a paid knowledge sharing feature, we employ difference-in-differences models in tandem with propensity score matching to evaluate the spillover effects of financial incentives on the abovementioned types of engagements. Our results show that the initial financial incentives on the paid knowledge sharing activities further motivate users to voluntarily share more knowledge and increase their social engagement in the platform. However, the financial incentives have no significant impact on users’ knowledge seeking behavior. Our study suggest that the financial incentives not just have an effect on incentivized engagement, but they spillover to users’ desirable non-incentivized online engagement behaviors. Therefore, the overall positive effect of financial incentives to a platform is likely under-estimated in prior research. Our research offers implications to practice that financial incentives can be an effective strategy to nurture users, to seed content, and to enhance sociality of a platform.

KEY WORDS AND PHRASES: financial incentive, spillover effect, user engagement, knowledge sharing, knowledge seeking, social engagement, online platform .