Assistant Professor Emilia Tjernström received a grant to measure the effects of introducing performance-pay contracts for citizen journalists in an online English-language news company in Kenya. The study will improve understanding of whether performance contracts increase profits and how they affect journalists’ output quality.
Tjernström’s project, Media and Motivation: the Micro-Foundations of the Market for News, is funded by the International Foundation for Research in Experimental Economics (IFREE). The $9,800 award was granted under the Small Grants Program, which funds research projects that are consistent with IFREE’s mission to promote human betterment through experimental economics that improves the understanding of exchange systems.
The online news company being studied garners more than a million monthly views and receives submissions from several hundred active reporters. Prior to the experiment, the authors of approved articles received a flat fee regardless of the article’s quality or the profit it generated via pageviews.
By randomly allocating the site’s active reporters to one control or two treatment groups, Tjernström, Ivan Balbuzanov of the University of Melbourne, and Jared Gars, a UW-Madison doctoral student, will compare the current contractual approach to the two new types of contracts. The new contract pays journalists based on the number of reader views that the article receives (performance pay). The second group of treatment writers will have the option of choosing between the fixed-fee and performance-pay contracts.
Tjernström, Balbuzanov, and Gars will collect information on each author's productivity (in terms of the number of articles published and the total number of clicks), and weekly, total, and per-article earnings over a six-month period. This will give the researchers insight into the effect of the different contracts on the news company’s profits and on individual productivity.
They also plan to measure, conditional on the contract, how authors' beliefs about their articles’ quality change over time, how risk aversion affects their performance and behavior, and whether they exhibit any systematic reporting bias.