Managing the Crowds: The Effect of Prize Guarantees and In-Process Feedback on Participation in Crowdsourcing Contests

47 Pages Posted: 13 Apr 2018 Last revised: 1 Jul 2018

See all articles by Lian Jian

Lian Jian

University of Southern California - Annenberg School for Communication and Journalism

Sha Yang

University of Southern California - Marshall School of Business

Sulin Ba

University of Connecticut School of Business

Li Lu

West Chester University of Pennsylvania - College of Business and Public Management

Crystal Jiang

affiliation not provided to SSRN

Date Written: April 1, 2018

Abstract

Crowdsourcing contests are contests by which organizations tap into the wisdom of crowds by outsourcing tasks to large groups of people on the Internet. In an online environment often characterized by anonymity and lack of trust, there are inherent uncertainties for participants of such contests. This study focuses on crowdsourcing contests with winner-take-all prizes. During these contests, submissions are made sequentially and contest hosts can provide public in-process feedback to the submissions as soon as they are received. Drawing on the uncertainty literature, we examine how the use of prize guarantees (guaranteeing that a winner will be picked and paid) and in-process feedback (numeric ratings to individual designs and public textual comments during the contest) can help reduce the various uncertainties faced by the contestant, thereby attracting more submissions. We find that guaranteeing the prize increases submissions. The volume of in-process feedback (both numeric reviews and textual comments) has a positive effect on the number of submissions, and such an effect is bigger in contests without prize guarantees. In addition, providing highly positive or extremely negative feedback discourage overall future submissions, and the negative effect of highly positive feedback is mitigated in guaranteed contests.

Keywords: Crowdsourcing Contest, Feedback, Prize Guarantees, Uncertainty, Participation

Suggested Citation

Jian, Lian and Yang, Sha and Ba, Sulin and Lu, Li and Jiang, Crystal, Managing the Crowds: The Effect of Prize Guarantees and In-Process Feedback on Participation in Crowdsourcing Contests (April 1, 2018). University of Connecticut School of Business Research Paper No. 18-11. Available at SSRN: https://ssrn.com/abstract=3161650

Lian Jian

University of Southern California - Annenberg School for Communication and Journalism ( email )

3502 Watt Way, Suite 304
Los Angeles, CA 90089
United States

HOME PAGE: http://www-bcf.usc.edu/~ljian/

Sha Yang

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

Sulin Ba (Contact Author)

University of Connecticut School of Business ( email )

368 Fairfield Road
Storrs, CT 06269-2041
United States

Li Lu

West Chester University of Pennsylvania - College of Business and Public Management ( email )

308 Anderson Hall
West Chester, PA 19383-2230
United States

Crystal Jiang

affiliation not provided to SSRN

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