Incentives, gamification, and game theory

Gamification is growing increasingly prevalent as a means to incentivize user engagement of social media sites that rely on user contributions. Badges, or equivalent rewards such as top-contributor lists that are used to recognize a user's contributions on a site, clearly appear to be valued by users who actively pursue and compete for them. However, different sites use different badge designs, varying how, and for what, badges are awarded--- some sites such as StackOverflow award badges for meeting fixed levels of contribution, while others like Amazon and Y! Answers reward users for being amongst some top set of contributors on the site, corresponding to a competitive standard of performance. Given that users value badges, and that contributing to a site requires effort, how badges are designed will affect the incentives--- and therefore the participation and effort--- elicited from strategic users on a site.