Engaging New Users with Introductory Incentives: Evidence from an Online Health Community

This paper studies the impact of short-term introductory incentives on new users’ retention and contribution in online communities. We draw on a policy change in a large online health community to compare new physicians who are affected by the policy versus those who are not. Based on the literature of online community and prospect theory, we find that (1) introductory incentives can increase user retention through newcomer activation, (2) even though introductory incentives increase contribution quantity and quality during the policy window, such incentives can significantly decrease contribution quantity in the long run, and (3) the effects of such incentives are contingent on users’ offline seniority, which creates opportunities for the platform to target different user groups with different incentives. These results are consistent in various robustness checks using different methods. This research contributes to the literature on identifying the impacts of introductory incentives and inter-temporal change of monetary incentives on new users’ activation, retention, and contribution in online communities. The findings also provide managerial insights into the design of monetary incentives in online communities.