An interesting research article has been recently published that explores the effect of badges on an eCommerce website. The study collected usage data from 3,234 users over a year and a half and found results which indicated that the use of badges in this setting didn't significantly increase engagement.
Citation: Hamari, J. (2013). Transforming Homo Economicus into Homo Ludens: A Field Experiment on Gamification in a Utilitarian Peer-To-Peer Trading Service. Electronic Commerce Research and Applications, 12 (4), 236-245. http://dx.doi.org/10.1016/j.elerap.2013.01.004