Do Incentive Hierarchies Induce User Effort? Evidence from an Online Knowledge Exchange

To motivate user contributions, user‐generated content sites routinely deploy incentive hierarchies, where users achieve increasingly higher statuses in the community after achieving increasingly more difficult goals. Yet the existing empirical literature remains largely unclear whether such hierarchies are indeed effective in inducing user contributions. We gather data from a large online crowd‐based knowledge exchange to answer this question, and draw on goal setting and status hierarchy theories to study users’ contributions before and after they reach consecutive ranks on a vertical incentive hierarchy. We find evidence that even though these glory‐based incentives may motivate users to contribute more before the goals are reached, user contribution levels drop significantly after that. The positive effect on user contribution appears only temporary. Moreover, such impacts are increasingly smaller for higher ranks. Our results highlight some unintended and heretofore undocumented effects of incentive hierarchies, and have important implications for business models that rely on user contributions, such as knowledge exchange and crowdsourcing, as well as the broader phenomenon of gamification in other contexts.