Prizes on Crowdsourcing Platforms: An Equilibrium Analysis of Competing Contests

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

Darden Business School Working Paper No. 3485193

30 Pages Posted: 15 Nov 2019

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 Jr.

University of Virginia - Darden School of Business

Date Written: November 11, 2017

Abstract

On a typical crowdsourcing platform solvers can self-select which (if any) of the concurrently running contests to participate in. Thus, firms who offer prizes and organize contests on these platforms are competing among themselves (for solver participation and effort). We formalize and model this competition among contests and examine the equilibrium outcomes. Our analysis reveals that, in general, there is a unique dominant strategy for each firm to offer multiple identical prizes. Moreover, when the quality of submitted solutions is sufficiently noise-driven (as opposed to effort-driven), we find that a single winner-take-all reward is the unique equilibrium allocation. Our analytical framework integrates and extends prior results of the monopolistic contest.

Keywords: crowdsourcing, incentives, multiple contests, winner-takes-all, endogenous participation

Suggested Citation

Stouras, Konstantinos I. and Erat, Sanjiv and Lichtendahl Jr., Kenneth C., Prizes on Crowdsourcing Platforms: An Equilibrium Analysis of Competing Contests (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 Jr.

University of Virginia - Darden School of Business

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

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