I’ve received $1.50 in TipJoy tips in only a couple of days — thanks! The only problem is, this is all virtual money at the moment, as none of the tippers have actually paid up. TipJoy lets tippers run up a debt and then pay later when the total gets to a reasonable amount like $5.

However, at the default of 10c per tip, it takes 50 tips to get to $5. At present, there are very few blogs and websites in the TipJoy network, so if the opportunities for people to leave tips are few, it’ll take a very long time for me to get paid, and virtual tips do not make me nearly so happy as actual cash. TipJoy does let you tip any website that you like, but the site owner only gets paid if they claim their tip, so I doubt that people will tip many sites that don’t specifically have the tip buttons. So I think there is a clear network effect here. TipJoy makes tipping very easy, but to get paid within a reasonable time, the TipJoy network of blogs and websites needs to be fairly large so that the frequency of tipping by tippers is reasonably high. The bigger the network, the more valuable it is to members.

Therefore I am calling on all econ (and other) bloggers: Add TipJoy to your site! If everyone does so, it’ll be more valuable to all of us.

On a practical note, I am wondering about the ability of ad-supported websites to join a tipping system. Does the contract with advertisers prohibit it?

Thanks to everyone who participated in my experiment by clicking the shiny green buttons. After stripping out search engine spiders and people who clicked multiple buttons, I received 154 “tips” over the 11 blog posts that I ran the experiment on. The total amount tipped was $38.21, or $3.47 per post. However, the posts were on the site for varying amounts of time, and older posts obviously tended to receive more tips. The median tips per day per post was 91 cents and the average was $1.08. Total tips per day were around $5. Over a year, that’s some nice beer money, and a lot more than I was making with Adsense.

The median across all tips was 10 cents, and the average was 25 cents (so the distribution is quite skewed). Here’s the distribution of all tips across the five amounts that were allowed:

Clearly more people tend to tip at the smaller amounts. However the spike at 25c is possibly interesting (or maybe just a statistical anomaly, I’m not sure). What is also interesting is that most of the revenues come from the bigger tips — demand seems to be quite price inelastic:

On a per-post basis, like I said above, the varying lengths of time makes comparisons across posts difficult. Comparing revenues per post per day shows a wide range, from 38 cents to $2.20:

Overall, I think it was an interesting experiment. I’ve now added TipJoy to all posts on my blog, so I’ll be seeing how actual tips compare to the data from this experiment. Very unfortunately, TipJoy doesn’t seem to work in RSS yet. So if you want to leave a tip, you’ll have to click back to the original blog post first.

I’ve started adding TipJoy buttons to my site. Currently they’re on the econ blog directory page and the ChatterMeter. If you want to show your appreciation for these things, please leave a tip. It’s really simple, just click the button. The default tip is 10 US cents. You get to run a credit balance and pay later. After I’ve collected $5 in paid tips, I can buy stuff from Amazon. That will make me happy. You want to make me happy, right?

I’ll be adding tip buttons to individual posts soon, and hopefully there will be a way to integrate TipJoy with RSS. Another wish would be to have a tip button inside a PDF file. Then you could tip me for my academic papers.

My own payments experiment is now finished, and I’ll post the results soon. It’ll be interesting to see how the “fake” tips compare to real ones.

Ok, I’m just going to give up on trying to think of Internet business ideas. As regular readers will know, I’ve been thinking a bit about micropayments lately. I had two ideas regarding micropayment systems for giving tips for blogs etc:

(i) Make it as simple as possible to give a tip (one click tipping); and

(ii) Allow tippers to give tips on credit, and collect the bills later.

I thought (i) was important to reduce transaction costs, and (ii) would help to overcome network effects problems. Other micropayment systems that I’ve seen require you to deposit some money first to set up an account. The problem is, if there are very few blogs or artists in the network, it’s very risky to deposit any money in the account, since you may never be able to use it to give tips to the people you want to. Anticipating a lack of tippers, bloggers and artists wouldn’t want to join the system either (the classic two-sided chicken-and-egg problem). My solution was to allow tips on credit. Then people will be less cautious about joining the system. And there’s very little incentive to cheat and not pay up later — why give a tip in the first place if you’re going to cheat? You’re just wasting your time and not getting anything nor hurting anyone else.

So it turns out that tipjoy pretty much implements these two ideas. It’s very simple, and you can tip on credit. I couldn’t have done it better myself. The only restriction is that you have to give your earnings to charity, or use them to buy stuff from Amazon. That’s fine, I like books.

Tipjoy is very new, just launched last month, and has already collected about $1,400 in tips. No where near a massive number, but it’s a start. I’m going to add it to my site once my micropayments experiment is over.

Check out the pretty pictures of the blogosphere in MIT’s Technology Review. Here’s one of Matt Hurst’s graphs of links between blogs:

You see, it is a sphere after all! The dense mass in the middle is the ‘core’ of the blogosphere, which is about 1,000 popular blogs related to politics, technology, and general news. Smaller communities live outside the core and link into it. I wonder where the econ blog community lives and what it looks like.