An Examination of the Dynamics of Crowdsourcing Contests: Role of Feedback Type

Abstract

As more businesses are turning to crowdsourcing platforms for solutions to business problems, determining how to manage the sourcing contests based on their objectives has become critically important. Aside from static design parameters, such as the reward, a lever organizations can use to dynamically steer contests toward desirable goals is the feedback offered to contestants during the contest. In this study, first, using the psychology literature on the theory of feedback intervention, we classify feedback into two types: outcome and process. Second, using data from almost 12,000 design contests, we empirically examine the effects of the two types of feedback on the convergence and diversity of submissions following feedback interventions. We find that process feedback, providing goal-oriented information to contestants, fosters convergent thinking, leading to submissions that are similar. Outcome feedback, on the other hand, encourages divergent thinking, producing a greater variety of solutions to a problem. Furthermore, the effects are strengthened when the feedback is provided earlier in the contest rather than later. Based on our findings, we offer insights on how practitioners can strategically use an appropriate form of feedback to either generate greater diversity of solutions or efficient convergence to an acceptable solution.