The Value of Teamwork: Evidence from Crowdsourcing Contests

Abstract

Virtual teams have become a popular mode of work in today’s globalized environment. However, the exact value of virtual teamwork remains elusive. In this study, we empirically analyze machine learning contests from Kaggle to investigate the impact of virtual teamwork on performance. We find that participants achieve significantly better performance when working in virtual teams than working independently. Furthermore, experienced participants benefit more from teamwork than their less-experienced counterparts. Our results also demonstrate that rival and nonrival incentives have opposite effects on the performance of virtual teams. The presence of symbolic rewards (nonrival) improves the performance of virtual teams, whereas team performance decreases with the size of the monetary rewards (rival). Finally, our mediation analysis provides suggestive evidence that teamwork enhances performance by stimulating the team members to work harder and more creatively. Our study provides critical insights into the value of teamwork and has practical implications for the composition of virtual teams and incentive design for crowdsourcing platforms.

Keywords: teamwork, incentive design, monetary reward, symbolic reward, experience