Do Non-monetary Virtual Gifts Enhance or Diminish Voluntary Paid Gifts? Evidence From a Video Game Live-Streaming Platform

This paper studies how the introduction of non-monetary gift channels affects voluntary monetary gift-giving in video game live-streaming. The ephemeral nature of live-streamed content confines monetization to the broadcast window, making voluntary paid gifts from viewers the dominant revenue source for streamers. Platforms have increasingly introduced non-monetary gifts to encourage viewer participation within streams. Yet there is no causal evidence on whether non-monetary gifts cannibalize or complement monetary gifts. We theorize that when specific platform design conditions are present (real-time public visibility, value-differentiated gift tiers, and synchronous interaction), non-monetary gifts can complement monetary gifts through costly signaling with norm elevation. Leveraging an exogenous policy change on a major live-streaming platform that increased viewers' access to non-monetary gifts, we analyze individual-level transaction data using multiple modern causal inference approaches. We find that non-monetary gifts significantly increase monetary gift spending. The primary driver is signaling dilution, as non-monetary gifts replicate the reputation value of the lowest paid tier, prompting viewers to escalate to costlier options to maintain differentiation. We also find early evidence of habit formation: previously non-paying viewers who experience non-monetary gift-sending are significantly more likely to begin and sustain monetary gifting. The net effect is complementarity over cannibalization, holding across viewer experience levels, streamer popularity tiers, and game genres. Our findings provide evidence that introducing non-monetary options in live-streaming can raise rather than lower voluntary monetary contributions when platform design enables signaling differentiation.