UCL School of Management is delighted to welcome Professor S. Sriram, Michigan, to host a research seminar discussing ‘Effect of Payment on User Engagement in MOOCs’
MOOCs have the potential to democratize access to education by improving access. Although retention and completion rates for free users have not been promising, these statistics are much brighter for paid users who receive a certificate upon completing the course. We investigate whether paying for the certificate option can increase engagement with course content. In particular, we consider two such effects: (a) certificate effect, which is the boost in motivation to stay engaged in order to receive the certificate and (b) sunk cost effect, which arises solely because the user paid for the course. We use data from over 70 courses offered on the Coursera platform and study the engagement of individual participants at different milestones within each course. The panel nature of the data enables us to include strong controls for intrinsic differences between free and paid users in terms of their desire to stay engaged. We find evidence that the certificate and sunk cost effects increase user engagement by approximately 10-12% each. However, while the sunk cost effect is transient and lasts only for a few weeks after payment, the certificate effect lasts until the participant reaches the grade required to be eligible to receive the certificate. We discuss the implications of our findings for how platforms and content creators may want to design course milestones and schedule the payment of course fees.