Alain Pinsonneault, Member of GReSI & Professor of IS, McGill Univ., and Yinan Yu, Post-doctoral Research Fellow in IS, McGill Univ.
When Paying for Reviews Pays Off: The Case of Performance-Contingent Monetary Incentives. Several online review platforms offer monetary incentives to motivate content generation in recent years. However, many studies have consistently shown that monetary incentives rewarding the completion of reviews tend to increase review quantity but significantly undermine quality. This research note extends the extant literature by examining the effects of monetary incentives rewarding review quality (i.e., performance-contingent monetary incentives) on both the quantity and quality of reviews. We take advantage of a natural experiment research design to analyze a large dataset collected from a restaurant review platform. Interestingly, the evidence shows that performance-contingent incentives have positive impacts on both review quality and quality. Further, review valence does not appear to be significantly inflated because of the incentives. This study complements past research by demonstrating the effects of a performance-contingent reward on reviewer behaviors. Our results can also help guide platform managers to design more efficient and effective reward policies. Keywords: performance-contingent monetary incentives, online review, review quality, review quantity, natural experiment