Dynamic Effect of Digital Badges in User-Generated Content Platforms

54 Pages Posted: 20 Apr 2020

See all articles by Shijie Lu

Shijie Lu

University of Houston - C.T. Bauer College of Business

Ying Xie

University of Texas at Dallas

Xingyu Chen

Shenzhen University - Department of Marketing

Date Written: July 2019

Abstract

User-generated content (UGC) platforms have increasingly adopted digital badges as a key mechanism to incentivize user engagement. Drawing from the extant literature, the authors theorize that digital badges can have an enduring effect on UGC consumption and creation beyond immediate effects because of the impact of digital badges on users’ underlying engagement states with the platform. To understand the dynamic effect of digital badges on user engagement, the authors propose a hidden Markov model and estimate the model using a unique panel data set from a large UGC platform. Four distinctive engagement states of users emerge from the estimation results. The immediate impact of digital badges is generally negative and homogeneous in discouraging both content consumption and generation. However, in the longer term, digital badges encourage content generation but suppress content consumption. This double-edged effect is most pronounced when users are in the middle-range engagement states. Finally, the authors demonstrate the managerial value of the proposed model in helping UGC platforms design digital badge algorithms to achieve their key marketing goals.

Keywords: Online Community, User-Generated Content, Digital Badge, Gamification, Hidden Markov Model, Dynamic Choice Model

Suggested Citation

Lu, Shijie and Xie, Ying and Chen, Xingyu, Dynamic Effect of Digital Badges in User-Generated Content Platforms (July 2019). Available at SSRN: https://ssrn.com/abstract=3560378 or http://dx.doi.org/10.2139/ssrn.3560378

Shijie Lu (Contact Author)

University of Houston - C.T. Bauer College of Business ( email )

Houston, TX 77204-6021
United States

Ying Xie

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

Xingyu Chen

Shenzhen University - Department of Marketing ( email )

3688 Nanhai Road, Nanshan District
Shenzhen, Guangdong 518060
China

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