Business Horizons (2015) 58, 347—353

Available online at www.sciencedirect.com

ScienceDirect
www.elsevier.com/locate/bushor

Managing information sharing in online

communities and marketplaces
Edward Boon a,*, Leyland Pitt b, Esmail Salehi-Sangari a

a
KTH Royal Institute of Technologies, Stockholm, Sweden
b
Beedie School of Business, Simon Fraser University, Vancouver, Canada

KEYWORDS Abstract Companies can engage with many online social networks and communities
Online communities; to attract customers, disseminate product information, conduct research, and stim-
Information sharing; ulate innovation. However, for these activities to be successful, it is key that
Game theory; consumers at these platforms trust each other and are willing to share their knowl-
Etsy.com edge freely. The study presented in this article assesses what companies can do to
encourage members of online communities and marketplaces to share information
with others. For this purpose, a netnographic study was conducted of Etsy.com, an
online marketplace for handcrafted and vintage products. The study revealed several
key findings: companies can stimulate information sharing through activities that
build trust and develop a norm of reciprocity; rules and guidelines are helpful to
discourage abuse, but do little to stimulate sharing; and companies should give the
right example by sharing knowledge themselves. The guidelines that were developed
based on these findings can be used by companies that own or manage an online
community as well as by those who intend to engage with one.
# 2015 Kelley School of Business, Indiana University. Published by Elsevier Inc. All
rights reserved.

1. Information sharing in online
communities
Researchers have known for some time that there
are significant benefits for companies to engage with
online communities. Online communities can be an
important part of consumers’ social networks, and
can affect their knowledge and attitudes toward
* Corresponding author
E-mail addresses: ecjboon@gmail.com (E. Boon),
lpitt@sfu.ca (L. Pitt), ess@indek.kth.se (E. Salehi-Sangari)
products and brands (De Valck, Van Bruggen, &
Wierenga, 2009). As a result, companies can use
communities to disseminate product information
and to engage and collaborate with their members
(Dholakia, Bagozzi, & Pearo, 2004). Online commu-
nities that center upon consumption-related inter-
ests can also be valuable sources of marketing
research, relationship building, and innovation, as
their members are typically more active and more
discerning than average consumers (Kozinets, 1999;
Sawhney, Verona, & Prandelli, 2005).
However, although there are many websites
where consumers discuss products and brands–—or

0007-6813/$ — see front matter # 2015 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved.
http://dx.doi.org/10.1016/j.bushor.2015.01.008
348
focus on activities that are related to them–—not all
of these platforms can be considered communities.
Gusfield (1978), one of the first scholars to define
what a community entails, identified three ‘markers
of community’: shared consciousness, rituals and
tradition, and a sense of moral responsibility. Fol-
lowing this reasoning, online platforms that do not
meet these criteria should not be called online
communities. Consumers who interact at platforms
where these three factors are absent may not ex-
perience the same level of trust and may therefore
not be as inclined to contribute and to share their
knowledge (Hsu, Ju, Yen, & Chang, 2007).
It is vital for companies that plan to communicate
with consumers online to be able to evaluate wheth-
er an online platform can be considered a commu-
nity. The degree to which companies can use an
online platform to obtain and disseminate informa-
tion, to build relationships, and to facilitate inno-
vation is directly reliant on the level of trust that
exists between its members and on their willingness
to collaborate and share knowledge.
Therefore, this article addresses the following
research question: What can companies do to stim-
ulate information sharing between members of an
online community? This question is relevant firstly
for companies that own or manage an online com-
munity and that want to increase the platform’s
value to third parties such as advertisers and market
researchers. However, the findings will be equally
useful for companies that want to know how to
evaluate different online platforms, and what they
can do themselves to encourage members to share
their knowledge.
To answer this research question, a study was
conducted on Etsy.com, an online marketplace for
handcrafted and vintage products. Although a mar-
ketplace is different from other online platforms
because its members (vendors) compete for the
attention of visitors (buyers), Etsy has been de-
scribed as a community because of the eagerness
of its members to exchange knowledge for the
benefit of the marketplace as a whole (Fitzgerald,
2009). Therefore, Etsy.com offers an interesting
case study to examine what drives this willingness
to share information, and what actions the company
Etsy takes to stimulate this. For this purpose, a
netnographic study was conducted of Etsy.com over
a period of 7 months (Kozinets, 2002).
This article will start with a discussion of the
drivers of information sharing in communities, fol-
lowed by an explanation of the chosen methodology.
The results of the study will be presented as a
number of guidelines that companies can follow
to encourage community members to share. To
conclude, the key findings are discussed, as well
E. Boon et al.
as their practical implications and a number of
limitations.
2. Information sharing as a social
dilemma
In the last decade, as an acknowledgement of their
importance for business, information sharing re-
search has focused increasingly on online communi-
ties. Ridings, Gefen, and Arinze (2002) suggest that
knowledge exchange is an important motivator to
join and engage in virtual communities, and there-
fore has a direct effect on the community’s value to
its members. In professional virtual communities,
information sharing can enable the community as a
whole to increase its knowledge and skills base (Hsu
et al., 2007). In virtual communities of consump-
tion, information sharing can lead to satisfaction,
which is a strong driver of purchase intention (Chiu,
Hsu, & Wang, 2006).
Information sharing in marketplaces has so far
remained relatively unexplored. However, an anal-
ogy can be found in Gezelius’ (2007) sociological
study of information sharing within fishing commu-
nities. In these communities, knowledge of the
whereabouts of fish is a critical factor, and the
prosperity of the community as a whole depends
significantly on fishermen’s willingness to share
what they know. Gezelius found that fishermen
are typically uneager to share good locations be-
cause they compete for income and prestige. How-
ever, there are two social norms that strongly
influence the propensity to share: the norm of
reciprocity means that if fishermen share informa-
tion, they will be rewarded in kind; while the norm
against telling lies ensures that those who do not
share risk becoming isolated. Even though fishermen
report that they experience tension between com-
petition and the need for cooperation, they virtually
never keep information to themselves.
Gezelius (2007) suggests that information sharing
between competing members of a community is not
a zero-sum game; it can increase the knowledge and
productivity of the community as a whole. We argue
that the same is true for online marketplaces: If
knowledge is shared freely between vendors, the
entire platform benefits, as the overall quality of
offered products is increased and vendors become
more adept at attracting visitors.
Information sharing within organizations and com-
munities where individuals are often disinclined to
share because their knowledge gives them a compet-
itive advantage has been described as a social dilem-
ma–—that is, a situation in which individual rationality
leads to collective irrationality (Cabrera & Cabrera,
Managing information sharing in online communities and marketplaces
Figure 1. Non-cooperative sequential game
2002; Kollock, 1998). This social dilemma can be
modeled, using game theory, as a non-cooperative
sequential game between two members (Gezelius,
2007), as shown in Figure 1.1 In this game, Vendor A is
the first to decide whether to conceal information
(defect) or share it with Vendor B. After that, Vendor
B makes the same decision. The scenario where both
parties conceal their knowledge can be considered
the status quo: neither party gains nor loses anything
and therefore the outcome is (0,0). If one vendor
shares while the other doesn’t, the non-sharer wins
at the expense of the sharer, so outcomes are (-1,3)
and (3,-1) respectively. However, if both parties share
their knowledge, they both win, leading to outcome
(2,2). It is important to note that the game is repeat-
ed, so it does not stop after two moves. As a result,
the game can have many possible outcomes.
The key to changing behavior in a non-
cooperative sequential game is to change the
payoffs for concealing and sharing (Gezelius,
2007). In practice, this can mean that vendors
who share information may receive recognition
within the organization and community, and those
who do not share may become isolated if other
members become aware of their defection.
3. Drivers of information sharing
A large number of factors that drive information
sharing in organizations and communities have been
identified. Possibly the driver that has been re-
searched most is trust, or ‘‘the belief that the other
party will not behave in an opportunistic manner’’
(Ba, 2001). Trust is particularly difficult to build in
online communities because there is no face-to-face
interaction and identities are masked (Ridings
et al., 2002). This is even more the case between
1
Strictly speaking, this diagram is for a non-repeating game,
while ours is repeating; but a repeating game is more difficult to
portray visually.
349
buyers and sellers in online marketplaces because
product quality often cannot be assessed before
purchase. Therefore, in most marketplaces, rela-
tionships remain impersonal and calculus based
(Ba, 2001). However, there are a number of ways
in which online communities and marketplaces can
increase the level of trust, including feedback-based
reputation systems, self-regulating policies, third-
party seals, branding, and confirmed personal data
(Hsu et al., 2007).
A second important driver of information sharing
is reciprocity. Gouldner (1960), who was one of the
first to recognize the importance of reciprocity in
business relationships, defined it as ‘‘the social norm
that people should help those who help them, and
should not injure those who helped them.’’ In com-
munities, the norm of reciprocity can prescribe that
a member cooperates with others (Gezelius, 2007).
In fact, it is not expected that the same person will
reciprocate, but rather that there is a generalized
reciprocity within the entire community (McLure
Wasko & Faraj, 2000).
A number of other factors affect information
sharing. Outcome expectation can stimulate com-
munity members to help others, with expected
benefits such as greater visibility and enhanced
reputation, a sense of self-worth and enjoyment,
and the opportunity to obtain clients (Dholakia
et al., 2004; Hsu et al., 2007). Perceived organiza-
tional ownership is another driver: If information is
perceived to be owned by the community rather
than by individuals or the organization, it creates a
greater sense of moral obligation to share (Cabrera
& Cabrera, 2002; McLure Wasko & Faraj, 2000).
4. A netnographic study of Etsy.com
To explore how members of a community can be
persuaded to share knowledge, even when it is not
in their personal interest to do so, a netnographic
study was conducted of Etsy.com, an online market-
place for handcrafted products and vintage items.
Netnography comprises the application of ethno-
graphic techniques to the study of online cultures
and communities (Kozinets, 1998, 2002). The meth-
od is cheaper and less time-consuming than tradi-
tional ethnography, and allows researchers to study
behavior in a natural (i.e., not simulated) environ-
ment in an unobtrusive manner.
The study was conducted over a period of 7 months,
between August 2012 and March 2013. To minimize
subjectivity, which is one of the method’s major lim-
itations, the observations were interpreted and dis-
cussed by researchers as a team, and verified
occasionally by asking questions on the Etsy forums
350
or through short interviews with its vendors. The
results of this study were used to develop a number
of guidelines for companies who want to stimulate
information sharing within communities.
Etsy was selected for this study because it has a
community of vendors who actively share knowl-
edge, to the benefit of the website as a whole. Fast
Company (Fitzgerald, 2009) calls Etsy ‘‘a community
[. . .] with actual meet-ups organized by location
(Singapore, Saskatchewan), medium (papier-maché,
mosaic) and interest area (Chainmailers Guild,
Lizards and Lollipops).’’ Therefore, Etsy offers a
good case study to evaluate what drives vendors in
online marketplaces to share information, and
what management can do to stimulate this sharing
behavior.
Etsy.com was founded in 2005 as an alternative to
eBay for vendors who wish to sell handcrafted items.
It is currently based in Brooklyn, NY. In November
2014 it had over 40 million members and 1 million
active shops; its 2013 vendor revenue was $1.35
billion. Etsy has three revenue streams: it charges
20 cents for each item that vendors post, it takes a
commission of 3.5% on each sale made through its
website, and it offers a variety of options for ven-
dors to advertise on its website (Etsy, 2014).
The average Etsy vendor is female, 32 years old,
college educated, and tech-savvy, and many of them
are active social media users (‘‘Etsy Crafts,’’ 2009).
Each vendor has a dedicated store/page where she
sells her items. Top vendors sell between 100 and
500 items per day, while thousands of others strug-
gle to sell anything. The consensus amongst vendors
is that, due to Etsy’s tremendous growth over the
last 5 years, it has become increasingly difficult for
vendors to generate significant revenue.
5. Guidelines for managing
communities
Based on the observations that were made during
the netnographic study, a number of general guide-
lines were developed for companies that want to
stimulate information sharing within an online com-
munity or marketplace. This section presents these
guidelines and discusses how Etsy follows them.
5.1. Offer a platform that allows for
member-to-member communication
This is the most fundamental criteria to stimulate
information sharing: members need to be able to
communicate with each other effectively. While
buyer-seller communication is essential for online
marketplaces to facilitate information exchange
E. Boon et al.
and transaction, it is less common for these plat-
forms to offer an effective way for buyers and
sellers to discuss matters that are not linked to a
particular sale.
Some marketplaces, including eBay.com, have a
discussion forum where both buyers and sellers can
post threads to ask others for advice. A rudimentary
examination of eBay’s discussion forum shows that
most messages that are posted concern vendors
complaining about interactions with buyers and vice
versa.
In contrast, Etsy offers its members a variety of
ways to communicate besides its forums, including
blog posts, video seminars, and group discussions
and webinars. It actively encourages vendors to
write about their experience and to share their
knowledge about crafting and selling on Etsy with
others. The resources that are created through
these facilities are particularly helpful for new
vendors to learn things such as which products sell
well on Etsy, how to photograph their items, or how
to use Search Engine Optimization (SEO) to increase
their store’s visibility to visitors.
5.2. Allow members to form smaller
groups around shared interests
If a community is large, it is important for individu-
als to be able to find members with whom they share
interest, and to develop personal relationships. The
formation of personal relationships between mem-
bers is one of the criteria for developing trust, which
is a key driver of information sharing.
Etsy offers an infrastructure where members can
form teams based on a common interests or con-
cerns. For example, teams may be composed of
members who craft similar items (e.g., jewelry or
furniture), use the same materials (e.g., wood or
metal), have the same challenge (e.g., product
photography, shipping abroad), or have the same
geographic location. Teams can have from 10 to
thousands of members. Each team has a dedicated
community forum, which allows members to ask
questions and discuss matters related to this shared
interest. Teams are managed by a team leader–—a
vendor who has taken it upon himself/herself to
start the team and organize its activities.
5.3. Encourage members to work
together to improve and promote their
stores
If vendors help each other, the quality of their stores
and the likelihood that they will sell will increase,
thereby increasing the number of visitors that the
website attracts and the revenue that is generated.
Managing information sharing in online communities and marketplaces
Besides the team forums, where members answer
each other’s questions and give each other feedback
on their products and selling techniques, Etsy also
allows members to work together to promote their
stores. This takes place in the form of treasury
games, via which a small group of vendors agree
to each make a treasury–—a collection of products
that they like–—using each other’s items. These
treasuries can be accessed by visitors looking for
ideas of what to buy. Additionally, groups of vendors
may agree to visit and ‘like’ each other’s products,
and post comments on each other’s page; as a
result, these products go up in the ranking of Etsy’s
search engine. Finally, a special kind of treasury
game goes a step further: it requires participants to
share each other’s treasuries on social media such as
Facebook and Twitter as a means to attract new
visitors to Etsy and to participants’ stores.
5.4. Reward members who help the
community with visibility
Individuals who stand out because they help other
members, or who serve the community as a whole,
can be rewarded by increasing the visibility of their
store and by making them known to others. This can
motivate them both intrinsically, as it gives them
status and appreciation, and extrinsically, as this
increased attention can help them to generate
business.
Etsy has a number of ways that it can reward
members who serve the community. For example,
these members’ stores may be featured on Etsy’s
front page, which can lead to a sizable increase in
visitors and sales. Members who help others may
also be invited to make a how-to video for the Online
Labs section of the Etsy platform, thus increasing
their standing amongst other vendors. Finally, there
is a special training and rewards program for mem-
bers who become team leaders, and each year it
hands out ‘team spirit awards’ to the most effective
team captains.
5.5. Make the reward system for serving
the community apparent to all members
The visibility that members get when they share
their knowledge with the community has the added
benefit that it will make others aware of the reward
system, which in turn will encourage them to act in
the interest of the community as well.
This is how it works for Etsy: Vendors who made
an effort to serve the community are known to
others and are treated with admiration. Being on
the front page, even for a single day, can have a
significant impact on sales, and being invited to
351
write a blog post or make a video is considered an
honor.
5.6. Give the right example by sharing
expertise yourself
Employees of your company play a pivotal role in
managing the online community. Not only are they
responsible for recognizing members who serve the
community and rewarding them appropriately, they
can also give the right example by sharing their own
knowledge. If the company shares their knowledge
with members, it makes it clear that information is
owned by the community, not by the company or by
individuals.
Etsy employees actively engage with the commu-
nity, give them advice, and resolve problems. They
also write their own blogs–—predominantly on what
works to sell items on Etsy.
5.7. Establish and enforce rules to
prevent malpractice
Although rules and behavioral guidelines do little to
increase information sharing within a community,
they are essential because they form the first hurdle
toward building trust and developing a sense of
moral responsibility.
Etsy has a comprehensive list of Dos and Don’ts for
vendors, through which it establishes its rules and
norms; it enforces these strictly. The rules cover
subjects such as membership, conversation with
buyers, financial transactions, giving and receiving
feedback, advertising, and engaging with the com-
munity. An examination of this list of rules reveals
that its purpose is to prevent abuse and malpractice.
6. Conclusion
The study presented in this article was conducted to
gain insight into what companies can do to stimulate
information sharing between members of online
communities. Communities where members trust
each other and are willing to exchange knowledge
are more likely to grow and improve their content,
and can become valuable sources of early-adopter
customers, knowledge, and innovation (Sawnhey,
Verona, & Prandelli, 2005).
The study shows that companies have a lot of
options available to stimulate the exchange of in-
formation. First, they can develop trust between
community members by establishing and enforcing
rules to prevent abuse and malpractice, by encour-
aging members to share personal information with
each other, and by assisting them to interact within
352
smaller groups of members with similar interests.
Second, companies can develop a norm of reci-
procity by rewarding members who help others with
visibility, and by making others aware of this reward
system. Finally, by giving the right example and
sharing their own knowledge freely, company em-
ployees can communicate to the community that
information is owned by the collective rather than
by individuals or by the company.
These guidelines are immediately applicable for
companies that own or manage an online social
platform. However, they can be equally relevant
for those that plan to engage with an online com-
munity. Online platforms can be evaluated based on
whether the companies that manage them establish
and enforce rules, offer the opportunity to form
smaller groups, reward socially active members,
and give the right example by sharing knowledge
themselves. Furthermore, companies can follow
these same guidelines when they decide to engage
in a community, and use them to encourage mem-
bers to participate in their activities.
The results of this study are also important to
academic researchers, since knowledge sharing in
online communities, in particular for marketplaces,
has so far been relatively underresearched. In addi-
tion, the findings can be extended to other online
communities where members compete for the at-
tention of visitors (e.g., credit markets and crowd-
funding platforms such as Kickstarter.com and
Indiegogo.com), and therefore they could offer re-
searchers a variety of directions for future research.
Nevertheless, it is important to acknowledge the
limitations of these findings, as they are based on
the netnographic study of a single online communi-
ty. Etsy.com vendors are different from members of
other communities in a number of ways: they are
predominantly female, their shared interest is in
design and handcrafting, and they are mostly based
in North America. Although a comparison with other
cultures falls beyond the scope of this study, it is
reasonable to assume that communities where
members have different demographics and interests
also have different attitudes toward sharing knowl-
edge. Therefore, perhaps the offered guideline
should be read as how information sharing between
community members can be stimulated rather than
how it should be.
Possibly the greatest ambiguity between compet-
ing and cooperating that Etsy vendors experience
has to do with existing customers. By advertising
your Etsy store to these customers, you also expose
them to thousands of other vendors, some of which
may be selling products similar to yours. We asked
about this on one of Etsy’s forums, and the response
we received was universally in support of reciprocity
E. Boon et al.
and the community. One vendor wrote: ‘‘The other
artist [who sold something to your customer] re-
ceived a bit of income that allowed him to persevere
and continue to promote Etsy where other buyers
will eventually find. . .you.’’ This illustrates the
power of online communities: If members place
the long-term interest of the community above their
own short-term gain, a collective outreach is gen-
erated that enables the community to improve and
grow. This could well be the reason for Etsy’s tre-
mendous growth over the last 5 years.
References
Ba, S. (2001). Establishing online trust through a community
responsibility system. Decision Support Systems, 31(3),
323—336.
Cabrera, A., & Cabrera, E. F. (2002). Knowledge-sharing dilem-
mas. Organization Studies, 23(5), 687—710.
Chiu, C. M., Hsu, M. H., & Wang, E. T. (2006). Understanding
knowledge sharing in virtual communities: An integration of
social capital and social cognitive theories. Decision Support
Systems, 42(3), 1872—1888.
Dholakia, U. M., Bagozzi, R. P., & Pearo, L. K. (2004). A social
influence model of consumer participation in network- and
small-group-based virtual communities. International Journal
of Research in Marketing, 21(3), 241—263.
Etsy. (2014). Etsy at a glance. Retrieved December 2, 2014, from
www.etsy.com/press
Etsy crafts a recession success. (2009, May 1). eMarketer.
Retrieved from http://www.emarketer.com/Article/
Etsy-Crafts-Recession-Success/1007066
Fitzgerald, M. (2009, February 10). Most innovative companies
2009: Etsy. Fast Company. Retrieved December 4, 2014, from
http://www.fastcompany.com/3018043/most-innovative-
companies-2009/44etsy
Gezelius, S. (2007). Can norms account for strategic action?
Information management in fishing as a game of legitimate
strategy. Sociology, 41(2), 201—218.
Gouldner, A. W. (1960). The norm of reciprocity: A preliminary
statement. American Sociological Review, 25(2), 161—178.
Gusfield, J. R. (1978). Community: A critical response. New York:
Harper & Row.
Hsu, M. H., Ju, T. L., Yen, C. H., & Chang, C. M. (2007). Knowledge
sharing behavior in virtual communities: The relationship be-
tween trust, self-efficacy, and outcome expectations. Interna-
tional Journal of Human-Computer Studies, 65(2), 153—169.
Kollock, P. (1998). Social dilemmas: The anatomy of cooperation.
Annual Review of Sociology, 22, 183—214.
Kozinets, R. V. (1998). On netnography: Initial reflections on
consumer research investigations of cyberculture. Advances
in Consumer Research, 25(1), 366—371.
Kozinets, R. V. (1999). E-tribalized marketing?: The strategic
implications of virtual communities of consumption. European
Management Journal, 17(3), 252—264.
Kozinets, R. V. (2002). The field behind the screen: Using netno-
graphy for marketing research in online communities. Journal
of Marketing Research, 39(1), 61—72.
McLure Wasko, M., & Faraj, S. (2000). ‘‘It is what one does’’: Why
people participate and help others in electronic communities
of practice. The Journal of Strategic Information Systems,
9(2), 155—173.
Managing information sharing in online communities and marketplaces 353

Ridings, C. M., Gefen, D., & Arinze, B. (2002). Some antecedents
and effects of trust in virtual communities. The Journal of
Strategic Information Systems, 11(3), 271—295.
Sawhney, M., Verona, G., & Prandelli, E. (2005). Collaborating to
create: The Internet as a platform for customer engagement
in product innovation. Journal of Interactive Marketing,
19(4), 4—17.
De Valck, K., Van Bruggen, G. H., & Wierenga, B. (2009). Virtual
communities: A marketing perspective. Decision Support
Systems, 47(3), 185—203.