Dueling contests and platform's coordinating role

University of California, San Diego, Rady School of Management Working Paper No 3485193

Darden Business School Working Paper No. 3485193

78 Pages Posted: 15 Nov 2019 Last revised: 21 Jan 2024

See all articles by Konstantinos I. Stouras

Konstantinos I. Stouras

UCD, Michael Smurfit Graduate Business School

Sanjiv Erat

University of California, San Diego (UCSD) - Rady School of Management

Kenneth C. Lichtendahl

University of Virginia - Darden School of Business

Date Written: November 11, 2017

Abstract

Crowdsourcing platforms typically take a passive approach, and let the competing firms freely design their own contests and allow every solver to self-select and join any of the concurrently running contests. We characterize the between-firm equilibrium in prize allocations and the induced participation-effort equilibrium among solvers. We find that the equilibrium prize allocation has fewer, but larger prizes compared to the benchmark where the contest organizer is a monopolist. Moreover, we identify a coordination inefficiency in the self-sorting equilibrium which negatively impacts the total and even the solver's welfare. This insight is expanded to identify normative platform policies, with the specific finding that both the solvers' and the total welfare is strictly improved by constraining the competing firms from freely choosing their prize budgets, and by nudging each solver toward specific contests by offering non-enforceable recommendations.

Keywords: crowdsourcing; nudges; incentives; multiple contests; endogenous participation

Suggested Citation

Stouras, Konstantinos I. and Erat, Sanjiv and Lichtendahl, Kenneth C., Dueling contests and platform's coordinating role (November 11, 2017). University of California, San Diego, Rady School of Management Working Paper No 3485193, Darden Business School Working Paper No. 3485193, Available at SSRN: https://ssrn.com/abstract=3485193 or http://dx.doi.org/10.2139/ssrn.3485193

Konstantinos I. Stouras (Contact Author)

UCD, Michael Smurfit Graduate Business School ( email )

Carysfort Ave
Blackrock
Ireland

Sanjiv Erat

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

HOME PAGE: http://www.rady.ucsd.edu/faculty/directory/erat/

Kenneth C. Lichtendahl

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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