July 08, 2008

Economics meets social psychology on incentive theory

In another June 2008 American Economic Review article, Ellingsen and Johannesson introduce a standard concept from social psychology into a standard economic model of incentives, and find that it helps explain some well-known empirical puzzles.

This is not at all the first article in the economics literature that explores the role of social motivations, and the authors provide a good discussion of prior work.

"In Pride and Prejudice: The Human Side of Incentive Theory", Ellingsen and Johannesson add two motivational premises to the standard principal-aget model: people value social esteem, and the value they experience depends symmetrically on who provides the esteem: they value esteem more from those who they themselves esteem.
Their main result is to show how an incentive that otherwise would have a positive effect on behavior can have a negative effect for some people because of what the incentive tells the agent about the principal. For example, they suggest this as an explanation for "the incentive intensity puzzle that stronger material incentives and closer control sometimes induce worse performance" (p. 990).


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March 29, 2008

Presentation at Yahoo! Research on user-contributed content

Yahoo! Research invited me to speak in their "Big Thinkers" series at the Santa Clara campus on 12 March 2008. My talk was "Incentive-centered design for user-contributed content: Getting the good stuff in, Keeping the bad stuff out."

My hosts wrote a summary of the talk (that is a bit incorrect in places and skips some of the main points, but is reasonably good), and posted a video they took of the talk. The video, unfortunately, focuses mostly on me without my visual presentation, panning only occasionally to show a handful of the 140 or so illustrations I used. The talk is, I think, much more effective with the visual component. (In particular, it reduces the impact of the amount of time I spend glancing down to check my speaker notes!)

In the talk I present a three-part story: UCC problems are unavoidably ICD problems; ICD offers a principled approach to design; and ICD works in practical settings. I described three main incentives challenges for UCC design: getting people to contribute; motivating quality and variety of contributions; and discouraging "polluters" from using the UCC platform as an opportunity to publish off-topic content (such as commercial ads, or spam). I illustrated with a number of examples in the wild, and a number of emerging research projects on which my students and I are working.

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March 06, 2008

The Pause of Mr. Clause

One of my students, who had a difficult week, mentioned that s/he was looking around for "downward social comparisons" to feel better. This phrase comes from the social psychology literature on motivations. The idea is that people are motivated by how they perceive themselves doing on some criterion relative to others. More recent versions of this distinguish between downward and upward comparisons.

This incident reminded me of one of my favorite stories. It was told by Arlo Guthrie back in the late 60s, around the time he became famous not for being the son of Woody, but for being the composer and performer of "Alice's Restaurant". AR is a long (18 minute) story told to a strummed motif, a "zygote of a melody" (to paraphrase Ani Difranco). Arlo told lots of stories less famous, too. One he would tell before singing "The Pause of Mr. Clause" (which is a song about how the FBI would be very suspicious of Santa Clause (sic), given his long beard, red clothes -- is he a commie? -- and what's in that pipe that he's smoking, anyway?). The story is the classic downward social comparison story. Here it is, copied from the version published in This is the Arlo Guthrie Book (Amsco Music Publishing, NY, 1969):

"During these hard days and hard weeks, everybody always has it bad once in a while. You have a bad time of it and you always have a friend that says, 'Hey, man, you ain't got it that bad. Look at that guy!' and you look at that guy and he's got it worse than you. And it makes you feel better that there's somebody that got it worse than you. But think of the last guy! Nobody's got it worse than that guy! Nobody in the whole world! That guy -- he's so alone in the world that he doesn't even have a street to lay in for a truck to run him over. Nothin's happenin' for that cat!

And all that he has to do to create a little excitement in his life is to bum a dime from somewhere, call up the FBI, say 'FBI' -- thay say, 'Yes'...say, 'I dig Uncle Ho and Chairman Mao, and their friends are comin' over for dinner!' Click. Hang up the phone. And within two minutes (and not two minutes from when he hangs up the phone, but two minutes from when he first put the dime in) they got 30,000 feet of tape rolling! Files on tape. Pictures, movies, dramas, actions on tape -- and then they send out half a million people all over the entire world...the globe...to find out all they can about this guy!

'Cause there's a number of questions involved in this guy. I mean, if he was the last guy in the world, how'd he get a dime to call the FBI? There are plenty of people that aren't the last guys that can't get dimes! He comes along and he gets a dime! I mean, if he had to bum a dime to call the FBI, how was he gonna serve dinner for all those people? How could the last guy make dinner for all those people? ANd if he could make dinner, and was gonna make dinner, then why did he call the FBI?

They find out all of those questions within two minutes! And that's a great thing about America. I mean, this is the only country in the world -- well, it's not the only country in the world that can find stuff out in two minutes, but it's the only country in the world that would take two minutes for that guy! Other countries would say, 'Hey -- he's the last guy. Screw him.' But in America, there is no discrimination and there is no hypocrisy 'cause they'll get anybody. And that's a wonderful thing about America."

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January 13, 2008

All user-contributed, all the time (almost)

I've been fascinated for the past couple of years with businesses that rely on user-contributed content (UCC) for substantial inputs to production. It is sometimes jokingly referred to as the "Tom Sawyer business model": get your friends to whitewash the fence for you, without paying them (in fact, they paid Tom quite handsomely, including "a key that wouldn't unlock anything, a fragment of chalk...and a dead rat on a string"). Tom Sawyer's Whitewash

Randall Stross writes in today's New York Times about two fairly well-known businesses that have nearly perfected the art: Plenty of Fish, and Craigslist. Craigslist is a wide-open classified advertising service where employers post jobs, homeowners sell their old "Monopoly -- Star Wars Version" games and unwanted gifts, and, most piquantly, people of every shape, age, color and preference seek partners for a nearly infinite variety of polymorphously perverse, chaste and romantic interactions. Craigslist is one of the top 10 visited English language sites, has versions for 450 localities in over 50 countries, and runs with only 25 employees. All of the content is written, edited (such as it is) and maintained voluntarily by users; user volunteers also provide most of the customer service through help forums.

Plenty of Fish is more specialized and not quite as successful, but perhaps more remarkable. It is a dating service localized to 50 Canadian, US and Australian cities. Markus Frind created it and devotes only about 10 hours a week to running it...and he only in the past year hired his first employee. Yet the site has 600,000 registered users (which grows rapidly despite purging 30,000 inactives a month), and receives 50,000 new photos per day. Spam-filtering of text is done by software. Filtering of photos (to make sure they are human and clothed) is done by user volunteere: in the past year the top 120 volunteers scanned over 100,000 photos each! The users provide the customer service too, through help forums.

Great business model: have the users whitewash the fence, and you work 10 hours a week for $10 million in annual profits (Stross estimates that Frind's claim about his advertising-only profits is plausible). What are the generalizable principles. How can *I* start such a business and succeed (the road is littered with UCC-driven businesses that never turn a profit).

It is obvious that one of the most important questions is why? Why would users volunteer the time and effort to provide the content, the customer service, the photo filtering, etc.? You may think it's obvious why users want to visit Plenty of Fish: there are a lot of lonely hearts out there. And it is 100% free to users: Frind only charges advertisers. Of course, without user effort, it won't succeed: there will be no information about potential life partners, no help information, and lots of undesirable photos polluting the service. But no individual user needs to contribute anything: there is no requirement for volunteer hours (as there is at our local food coop), there is no public tracking of effort and peer pressure to pull your weight. It's a free-rider's dream.

Contributing content is easy: if you don't submit a profile you aren't going to get any dates. But what about photo scanning? Yes, you want to scan photos anyway: that's why you're there. But why not let someone else filter out the junk so you only have to filter the worthwhile photos? Is there that much of a first-mover advantage that you are willing to filter 100,000 photos per year to have a shot at being the first to contact the newest hunk? My guess is that the expected return on that investment is pretty low.

And why spend your time providing free help service to other users? Maybe Plenty of Fish is lucky to have a demographic for whom the value of time is unusually low (lonely single people with nothing else to do on Saturday night), but that just means the cost is lower to make the contribution: what is the benefit? Is it that the volunteer helpers are trying to be noticed as helpful, well-informed web geeks as a way of attracting dates?

I think the answers to these questions are transparently not obvious. If the answers were easy, we'd have a lot more people working 10 hours a week to make $10 million per year. And the answers are not likely to be something that involves only traditional economic views about incentives and motivations. Developing generalizable principles about the motivations for user-contributed content will surely need to draw on psychological explanations as well, from the psychology of personality and self, and social psychology (at least).

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July 10, 2007

The social psychology of Facebook?

John Kirriemuir wrote a casual entry in his blog about the "psychology of Facebook". It is a lighthearted piece, but thoughtful. He suggests various informal hypotheses about why they spoke is succeeding, focusing in particular on the effort people make to grow their networks.

I would like to start learning about social psychology theory and what it might usefully say for incentive-centered design of information systems. My expertise in ICD is largely grounded in individual utility maximization and game theory. I have been saying for the last couple of years that "social motivations" are clearly important for some of the fundamental issues (motivating people to contribute to public resources, motivating them to make effort sufficient to generate high-quality contributions, and motivating them not to misuse and open access platform for unintended purposes). But other than my instincts and casual observation, I have little to go on.

Kirriemuir is not a social scientist (and is clear that he is not claiming to be), and his article is also casual. The social motivations he suggests are not clearly enough to find to test them or generalize to other settings, and his analysis is ex post description, which really does not serve as explanation (in the sense of enabling us to predict or successfully designed in other settings). But he asks good questions, and I think he is right that humans respond to various predictable social motivations in ways that are important for the success or failure of different social information systems.

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