Motivation of User-Generated Content: Social Connectedness Moderates the Effects of Monetary Rewards

The creation and sharing of user‐generated content such as product reviews has become increasingly ‘social,’ particularly in online communities where members are connected. While some online communities have used monetary rewards to motivate product review contributions, empirical evidence regarding the effectiveness of such rewards remains limited. We examine the possible moderating effect of social connectedness (measured as the number of friends) on publicly offered monetary rewards using field data from an online review community. This community saw an (unexpected) overall decrease in total contributions after introducing monetary rewards for posting reviews. Further examination across members finds a strong moderating effect of social connectedness. Specifically, contributions from less‐connected members increased by 1,400%, while contributions from more‐connected members declined by 90%. To corroborate this effect, we rule out multiple alternative explanations and conduct robustness checks. Our findings suggest that token‐sized monetary rewards, when offered publicly, can undermine contribution rates among the most connected community members. Data and the online appendix are available at https://doi.org/10.1287/mksc.2016.1022