Online Incentive Hierarchies, Review Extremity, and Review Quality: Empirical Evidence from the Hotel Sector

Incentive hierarchies are routinely adopted by websites that rely on user-generated content (UGC). They aim to motivate users to contribute by awarding them increasingly higher status on the platform after more and more difficult goals have been achieved. However, whether or not such functionality actually induces high-quality content, and how it changes reviewer behavior, remains unclear. We gather user data from TripAdvisor to answer these questions. The results show that (1) the average quality of the content produced by a reviewer drops as status increases, and (2) reviewers with higher-level badges are less likely to post extreme ratings. In other words, the cumulative effect of “glory-based” incentives appears to be only temporary and decreases as time passes. Our results demonstrate some unanticipated effects of online incentive hierarchies and have important implications for business models inside and outside the hospitality industry that rely on user contributions.