Sidika Tunc Candogan – School of Management, University College London, United Kingdom
In an innovation contest, an organizer elicits solutions to an innovation-related problem from a group of solvers. Although solvers are capable of developing individual solutions and making individual submissions, if the organizer encourages collaboration, solvers may collaborate as teams and make team submissions. Motivated from different policies adopted by various crowdsourcing platforms (e.g., InnoCentive, Topcoder, and 99designs), we identify conditions under which the organizer can benefit from team submissions. By examining equilibrium outcomes of a game-theoretic model, we show that when the organizer seeks high-novelty solutions to a nondecomposable problem (e.g., design challenges at InnoCentive), the organizer can benefit from team submissions despite the decrease in solvers’ efforts. Yet, when the organizer seeks low-novelty solutions to a nondecomposable problem (e.g., logo design challenges at 99designs), the organizer may not benefit from team submissions. We further show that when the organizer seeks low-novelty or high-novelty solutions to a decomposable problem (e.g., software challenges at Topcoder), the organizer can benefit from team submissions, but under some conditions. Finally, we also analyze when solvers can benefit from collaborating as teams because the organizer’s benefit from team submissions hinges upon solvers’ decisions. We show that unless there emerges synergy within teams, solvers can benefit from collaborating as teams because collaboration reduces solvers’ incentive to exert effort.