Express 12: Social preferences? Google Answers!

Tobias Regner
May 2014, Games and Economic Behavior
http://www.sciencedirect.com/science/article/pii/S0899825614000189

The author analyzes pricing, effort and tipping decisions at the online service “Google Answers” where users set a price for a question ex ante and can additionally tip the researcher who provides the answer ex post. Usually a positive wage-effort correlation can be found in similar settings, which can be explained by either reciprocity or reputation incentive. The field data provides evidence for both explanations.
Reciprocity:

• A substantial amount of single users tip and the tendency to tip is positively correlated with effort.
  
• The users have three typical types: myopic, strategic and reciprocal and the decision of tipping has significant gap among the three.
  

Reputation concerns with Bayesian updating:

• The tendency to tip increases with the frequency of use.
  
• The tip rate of frequent users in their last question is higher than the tip rate of single users.
  
• Effort choices depend on past behavior of the user.
  

See Dufwenberg and Kirchsteiger (2004) for theory of sequential reciprocity and Kreps et al. (1982) for theory of reputation with Bayesian updating.