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Why Voluntary Contributions? Google Answers

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Author Info
Tobias Regner
Abstract

We study the pricing and tipping behaviour of users of the online service `Google Answers'. While they set a price for the answer to their question ex ante, they can additionally give a tip to the researcher ex post. We develop a model that is based on reciprocal theories of social preferences pioneered by Rabin (1993) and extended by Dufwenberg and Kirchsteiger (2004). The predictions of our model are empirically tested with the field data we obtained. The reasons for leaving a tip are analysed. A significant amount of users are motivated by social preferences. We also find strong support for reputation concerns. Moreover, researchers appear to adjust their effort based on the user's previous tipping behaviour. We conclude that an endogenous incomplete contracts design encourages people to contribute voluntarily. This is motivated by reciprocity when people are socially minded, but also generally by strategic behaviour to build up a good reputation. Efficiency is increased when contracts are left open deliberately as high effort is sustained.

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File URL: http://www.bris.ac.uk/Depts/CMPO/workingpapers/wp115.pdf
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Publisher Info
Paper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 05/115.

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Length: 26 pages
Date of creation: Jan 2005
Date of revision:
Handle: RePEc:bri:cmpowp:05/115

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Related research
Keywords: social preferences; reciprocity; moral hazard; reputation; internet;

Find related papers by JEL classification:
C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models
C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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  1. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May. [Downloadable!] (restricted)
    Other versions:
  2. Luís Cabral & Ali Hortacsu, 2004. "The Dynamics of Seller Reputation: Theory and Evidence from eBay," Working Papers 04-05, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
    Other versions:
  3. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," Department of Economics, Working Paper Series 1042, Department of Economics, Institute for Business and Economic Research, UC Berkeley. [Downloadable!]
    Other versions:
  4. Ernst Fehr & Simon Gachter & Georg Kirchsteiger, 1997. "Reciprocity as a Contract Enforcement Device: Experimental Evidence," Econometrica, Econometric Society, vol. 65(4), pages 833-860, July.
  5. Ingrid Seinen & Arthur Schram, 2001. "Social Status and Group Norms," Tinbergen Institute Discussion Papers 01-003/1, Tinbergen Institute. [Downloadable!]
  6. Azar, Ofer H., 2004. "The history of tipping--from sixteenth-century England to United States in the 1910s," The Journal of Socio-Economics, Elsevier, vol. 33(6), pages 745-764, December. [Downloadable!] (restricted)
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  7. Fehr, Ernst & Klein, Alexander & Schmidt, Klaus M., 2001. "Fairness, Incentives and Contractual Incompleteness," CEPR Discussion Papers 2790, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  8. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-44, September. [Downloadable!] (restricted)
  9. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December. [Downloadable!] (restricted)
  10. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, vol. 1(1), pages 60-79, March. [Downloadable!] (restricted)
  11. John A. List, 2004. "Young, Selfish and Male: Field evidence of social preferences," Economic Journal, Royal Economic Society, vol. 114(492), pages 121-149, 01. [Downloadable!] (restricted)
  12. Fehr, Ernst & Schmidt, Klaus M., 2001. "Theories of Fairness and Reciprocity - Evidence and Economic Applications," CEPR Discussion Papers 2703, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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