Abstract
The Web 2.0 is increasingly considered as a phenomenon that affects the way people interact, search, post and share information on the Internet. Namely it affects the daily life of any Web user, expert or company that works on the network daily. One of the dominant traits of Web 2.0 applications is the capability of co-opting end-users in endeavors which traditionally have been considered as topdown activities and exploiting user-based networks. Through Web 2.0 applications users add content and annotation in order to describe and share pictures, videos, files, etc. Apart from some of the most well known applications (e.g., Facebook, Twitter, Flickr and the like), many Web 2.0 tools are not good at attracting a critical mass of individuals. In fact, many studies have shown that a common outcome for online communities is an ’onion’ structure were only a few core individuals actively participate discussing and contributing to the common content, whereas others are considered as peripheral users who observe the community and simply use the content. Participation and willingness to contribute, thus, become two of the critical issues that companies and software developers should take into account when creating Web 2.0 applications. In other words, we claim that understanding and analyzing appropriate sets of incentives that might motivate users to contribute are critical steps in the design of Web 2.0 applications. In this paper, we describe how theories and techniques that are well known and used by scientists in economics and management studies can be used to develop incentive-compatible Web 2.0 tools. Specifically, we will provide an example of an application of mechanism design and applied experimental economics in the development of an annotation tool.