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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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Bibliographic 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;

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References

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  1. 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.
  2. Dufwenberg, M. & Kirchsteiger, G., 1998. "A Theory of Sequential Reciprocity," Discussion Paper 1998-37, Tilburg University, Center for Economic Research.
  3. 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.
  4. Ingrid Seinen & Arthur Schram, 2001. "Social Status and Group Norms," Tinbergen Institute Discussion Papers 01-003/1, Tinbergen Institute.
  5. Gary Charness & Matthew Rabin, 2003. "Understanding Social Preferences with Simple Tests," General Economics and Teaching 0303002, EconWPA.
  6. Matthew Rabin., 1992. "Incorporating Fairness into Game Theory and Economics," Economics Working Papers 92-199, University of California at Berkeley.
  7. Ernst Fehr & Alexander Klein & Klaus Schmidt, 2001. "Fairness, Incentives and Contractual Incompleteness," CESifo Working Paper Series 445, CESifo Group Munich.
  8. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, vol. 1(1), pages 60-79, March.
  9. 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.
  10. Amemiya, Takeshi, 1984. "Tobit models: A survey," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 3-61.
  11. 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.
  12. Ofer H. Azar, 2003. "The History of Tipping - From Sixteenth-Century England to United States in the 1910s," Economic History 0309001, EconWPA.
  13. 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.
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