Using both a theoretical model and an empirical analysis of field data, the research uncovers the important implications of feedback provision in ideation contests. The dataset includes 9,771 logo design contests in which 415,779 solvers submitted a total of 572,046 logo designs and won nearly 3.4 million CNY in rewards.
In today’s world, firms need to innovate faster than ever before to stay ahead of the competition. An increased emphasis has been placed on ideation— a process of generating new ideas for solving business problems, creating designs and improving products or processes. In particular, ideation contests have gained massive popularity where firms and organizations (i.e., seekers) outsource ideation projects to a community of experts and enthusiasts (i.e., solvers) in the form of an open call with bounties for winners.
In this study, the researchers develop a game-theoretic model of feedback in unblind ideation contests, where solvers’ solutions and the seeker’s feedback are publicly visible. Their analysis shows that feedback plays an informative role in mitigating the information asymmetry between the seeker and solvers, thereby inducing solvers to exert more efforts in the contest. In addition, some key contests and solver characteristics (CSC, including contest reward, contest duration, solver expertise, and solver population) have a direct effect on solver effort. Interestingly, the optimal feedback volume also increases with contest reward, contest duration, solver expertise, but decreases with the solver population. Thus, CSC elements also have an indirect effect on solvers’ effort level, with feedback volume mediating this effect.
An empirical analysis was conducted to verify these theoretical predictions. The dataset includes 9,771 logo design contests in which 415,779 solvers submitted a total of 572,046 logo designs and won nearly 3.4 million CNY (Chinese Yuan) in rewards. Analysis of the data uncovers patterns that are consistent with the theory.
Contributions: Existing literature usually takes the seekers’ feedback as exogenous, while this paper takes the first step towards proposing and validating that seekers are indeed strategic in determining whether to provide feedback and the feedback volume. In light of these results, when assessing the total effect of CSC on solvers’ effort level, firms should consider both the direct effect and indirect effect through feedback volume. Otherwise, the design of CSC could be suboptimal.
Jiang, Juncai and Yu Wang (2019), “A Theoretical and Empirical Investigation of Feedback in Ideation Contests,” Production and Operations Management, forthcoming.
Production and Operations Management Journal