Aren’t we free-riders after all?


Nowadays, many online public goods rely on the input of the users. In fact, co-created open source software communities (e.g. Linux, Firefox, and Apache), content sharing networks (e.g. YouTube, Instagram), and open content productions like Wikipedia entirely rely on voluntary user contributions (Zhang & Zhu, 2011).

The group size of a particular community plays an important role in the incentives of users to contribute. For years, the free-rider hypothesis has been the dominant focus in the literature on private provision of public goods. This theory implies that when the size of a group grows, the contribution level of individuals declines (Olsen, 1965). However, over the years, researchers have renounced this pure altruism based view. It appeared that there was more than just the utility from total provisions of the public good that affected contribution incentives in public goods.

The importance of impure altruism made its appearance. Multiple studies (e.g. Ribar & Wilhelm, 2002; Andreoni, 2006) disproved the free-rider hypothesis that solely takes pure altruism into account. For instance, they showed that when the group size becomes sufficiently large, the importance of pure altruism disappears and on the other hand social benefits become the main motive for users to contribute.

Unlike the many experimental based studies on the effect of group size on individual-level contributions, Zhang and Zhu (2011) used field data in the form of the Chinese-language edition of Wikipedia to study the relationship.

Between October 2002 (the start of the Chinese version of the site) – July 2008, the website has been blocked and unblocked 5 times (see figure 1). In these blocked periods, people from mainland China could not access Wikipedia and thus not contribute to the site.

Zhang and Zhu (2011) focused their empirical analysis on the third block since it was the longest of the five blocks (nearly a year) and it received most publicity. This last mentioned point took away the concern that individuals were unaware of changes in the environment, something that impacts contribution levels.

By examining contribution levels of users, the researchers found out that the contribution levels of non-blocked users had significantly reduced (42.8% on average) during the block. Contributors who value social benefits more, reacted more strongly on the change by contributing even less in the blocked period. The idea behind this decline is that contributors receive social benefits when they contribute to the public good. The shrunken group size subsequently reduced these benefits.

Overall, the theoretical contribution of this research is the on field data based support that, in a setting with a large group size, social benefits indeed dominate the free-riding incentives. This outcome provides an explanation of the existence of many public goods with a large base of contributors. Furthermore, this paper helps to explain the observation that people prefer contributing to large online communities.

This outcome can be of practical relevance for users and administrators of other public goods available on the internet, since it emphasizes the importance of social effects in the provision of (online) public goods.

References

Andreoni, J. (2006) “Philanthropy,” in Serge-Christophe Kolm and Jean Mercier Ythier, eds., Handbook of the Economics of Giving, Altruism and Reciprocity: Applications, Vol. 2, North Holland, 2006, chapter 18.

Olson, M. (1965). The logic of collective action: Public goods and the theory of group (p. 176). Cambridge: Harvard University Press.

Ribar, D. C., & Wilhelm, M. O. (2002). Altruistic and joy‐of‐giving motivations in charitable behavior. Journal of Political Economy, 110(2), 425-457.

Zhang, M. and Zhu, F. 2011. Group Size and Incentives to Contribute: A Natural Experiment at Chinese WikipediaAmerican Economic Review 101(4) 1601-1615.

Photo: Wikipedia.org, accessed 03-04-2015,  http://upload.wikimedia.org/wikipedia/commons/1/1f/Wikipedia_mini_globe_handheld.jpg

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