Do Money-based Incentives Improve User Effort and UGC Quality? Evidence from a Travel Blog Platform

Although user-generated content (UGC) is prevalent these days, high-quality UGC is still desired by readers and is crucial for the development of a website. Therefore, how to encourage users to produce high-quality content becomes a critical issue for UGC platforms. Using travel blogs collected from Lvmama.com, a leading online travel agency (OTA) in China, we investigated the effects of money-based incentives on user effort to generate high-quality content and its performance in the long run. The launch of money-based incentives after several years of running of the platform provides an ideal natural experiment setting. We applied the regression discontinuity design, and the results show that both user effort and UGC quality increased after the incentive program was released. However, the UGC quality declined quickly after that. This study concludes by presenting theoretical and managerial implications for both research and practice. This study represents one of the first attempts to investigate the effect of money-based incentives on the quality of UGC, while prior studies mainly focus on the effect of glory-based incentives on the quantity of UGC (Cavusoglu et al., 2015; Goes et al., 2016; Hamari, 2017). Unlike the glory-based incentives, the money-based incentives involve money. In the Maslow's hierarchy of needs, the money is more like the lower level of physiological needs, whereas the glory is more like the higher level of needs such as self-actualization. Therefore, it is obviously that the money reward could attract more people than the glory reward since there are more individuals having the physiological needs. Our results show users are strategic in the money-based incentives. They pretend to take more effort by writing more words and posting more photos to earn money, but the true quality measured by the number of likes does increase in long term. Another theoretical contribution to the literature of this study is the effort is measured by the quality, whereas extant literature mainly pay attention to the quantity of UGC (Cavusoglu et al., 2015; Goes et al., 2016; Hamari, 2017). For example, users’ effort in Goes et al. (2016)’s work is measured by the number of questions answered. In fact, the quality is more important than the quantity since all people need high quality information but not many low quality information. Therefore, it is more important to understand why do users contribute high quality UGC. This study shed a light on the future investigation on the UGC motivation. Our results yield direct implications for UGC platforms to encourage users to generate more high-quality content. First, the powerful effect of money-based incentives results in a 40% increment in text length on the platform, which largely increases the reading load of information searchers. Therefore, we suggest that the platform set a maximum number of words for each blog. The length limit will encourage the users to take more effort to improve the quality instead of merely including more information. Additionally, the platform should consider more about the content quality rather than the length when officially recognizing qualified blogs. Second, the positive jump of UGC quality after the rewards