The Impact of Performance-Contingent Monetary Incentives on User-Generated Content Contribution

User-generated content (UGC) has become increasingly important in both individuals’ daily life and business application. To encourage contributions, online platforms have utilized completion-contingent monetary incentives, wherein financial rewards are equally offered to each contributor who successfully completes a specific task. However, recent studies find that completion-contingent monetary rewards increase the volume of UGC at the expense of the compromise on quality. In this study, we use a natural experiment research design to investigate the effect of an alternative reward structure, performance-contingent monetary incentives, on UGC generation. Since performance-contingent incentives are only rewarded to owners of high-quality content, this design may crowd in individuals’ intrinsic motivation via enhancing their perceived competence, and therefore stimulate their contribution of more content without compromising on quality. This research will advance our understanding of how different monetary incentive policies influence UGC contribution in online communities