Why Voluntary Contributions? Google Answers! (PDF, file 334 KB) (PDF, 333kB)
Tobias Regner
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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