The Impact of Gamification on Word-of-Mouth Effectiveness: Evidence from Foursquare

Abstract

Companies are encouraging and incentivizing contributors of online word-of-mouth (WOM) through gamification elements such as badges, mayorships, points, and such. We study how gamification elements, which capture and signal contributors’ accumulated expertise, affect consumers’ perception of contributors’ knowledge, and therefore the perceived effectiveness of their contributed WOM. We focus on two specific gamification elements on Foursquare: badges, which signal breadth of knowledge, and mayorships, which signal depth of knowledge. Using experiments conducted on Amazon Mechanical Turk, we find: (1) badges and mayorships that appear alongside contributors’ online WOM, provide a unique way to signal WOM contributors’ knowledge and therefore have an impact on the perceived effectiveness of such WOM; (2) the impact of badges on perceived WOM effectiveness is higher than that of mayorships. Our findings have important implications for the ongoing research on the impact of gamification and also suggest ways for firms to benefit from gamification.