Do Monetary Incentives Create a Spillover Effect on Free Knowledge Contribution? Evidence from a Natural Experiment

Knowledge sharing is common on the Internet. In this paper, we study the effect of introducing monetary incentives for hosting live talks on users' contribution to non-rewarded activity of answering questions on the same online question-and-answer platform. Using a combination of coarsened exact matching and difference-in-differences estimation techniques, we find that introducing paid program creates a positive spillover effect on the participants' free contributions. After the paid feature was introduced, participants contribute 28.5% more answers and the answers contain 20.4% more characters, receive 39.8% more vote-ups from other users, cover more diverse topics, and address more popular questions. We conduct a battery of tests and conclude that reputation building is likely the mechanism underlying the spillover. We do not find evidence on competing mechanisms such as explicit advertising, reciprocity, time reduction, and knowledge competition. We draw related research and managerial implications