The Impact of Network Size and Financial Incentives on Adoption and Participation in New Online Communities

The success of online communities depends heavily on the providers' abilities to motivate potential users to adopt the service and to actively participate. Because research in this field of media economics is rare, especially with regard to newly established communities, this study analyzes what drives community adoption and how direct and indirect financial incentives influence user participation. Extending Ajzen's (1991) Theory of Planned Behavior, this article shows, in 2 empirical studies, that network size significantly affects adoption in newly established communities. The results of the first study indicate a strong effect of indirect financial incentives (saving money) on the intention to adopt. The second study indicates that direct financial incentives (earning money) may well help increase the network's size without altering user motivation through crowding-out effects. It is interesting to note that the presence of direct financial incentives attracts new users, but it does not increase usage.