Ideators' Diverse Incentive Preferences and the Benefits of Offering a Choice in Crowdsourcing Contests

Core Concepts

Individuals exhibit heterogeneous incentive preferences and often prefer non-cash incentives, even in for-profit contexts. Offering ideators a choice of incentives can enhance creative performance, but the effectiveness depends on the market context and the degree of preference heterogeneity.

Abstract

This multi-study research explores ideators' preferences for cash and non-cash incentives in crowdsourcing contests and investigates how offering a choice of incentives affects their creative performance.
Study 1 (Field Experiment):

Quantified ideators' incentive preferences in a realistic crowdsourcing contest setting.
Found that 49% of ideators preferred non-cash incentives over cash, with diverse preferences for different non-cash options.
Provided preliminary evidence that offering a choice of incentives can improve idea quality, using an econometric approach to account for self-selection.
Study 2 (Online Experiment):

Validated the main effect of offering a choice, finding that choice improved idea quality but not effort.
Showed that choice reduces the effectiveness of cash incentives on quality and amplifies the positive effect of non-cash incentives on effort.
Study 3 (Online Experiment):

Explored how market context (for-profit vs. non-profit) moderates the effect of incentives.
Found that effort is generally lower in for-profit settings and even lower when combined with non-cash prizes.
Study 4 (Online Experiment):

Established preference heterogeneity as an important boundary condition.
In a homogeneous population of gig workers focused on earning income, there was no interest in non-cash incentives and no benefit to offering a choice.
The findings suggest that offering a choice of incentives, including both cash and diverse non-cash options, can be an effective strategy for crowdsourcing contests, but the effectiveness depends on the degree of preference heterogeneity in the ideator pool.

Stats

Ideators preferred non-cash incentives over cash in 49% of cases.
Offering a choice of incentives improved idea quality by 6.6%.
Effort was lower in for-profit settings and even lower when combined with non-cash prizes.

Quotes

"Individuals exhibit heterogeneous incentive preferences and often prefer non-cash incentives, even in for-profit contexts."
"Offering ideators a choice of incentives can enhance creative performance, but the effectiveness depends on the market context and the degree of preference heterogeneity."

Key Insights Distilled From

Cash or Non-Cash? Unveiling Ideators' Incentive Preferences in Crowdsourcing Contests

by Chri... at arxiv.org 04-03-2024

https://arxiv.org/pdf/2404.01997.pdf

Deeper Inquiries

How can crowdsourcing organizers best design a menu of incentive options to cater to diverse ideator preferences?

Crowdsourcing organizers can best design a menu of incentive options by offering a variety of both cash and non-cash incentives to cater to diverse ideator preferences. This approach allows ideators to self-select the incentive that aligns best with their motivations and preferences. By providing a range of options, organizers can ensure that they are appealing to a broader audience and increasing the likelihood of attracting high-quality submissions. Additionally, organizers should consider the context of the crowdsourcing contest, whether it is for-profit or non-profit, as this can influence the effectiveness of different types of incentives. By understanding the motivations of the ideators and offering incentives that resonate with them, organizers can create a more engaging and successful crowdsourcing contest.

What are the potential downsides or unintended consequences of offering a choice of incentives in crowdsourcing contests?

While offering a choice of incentives can have benefits, there are also potential downsides and unintended consequences to consider. One downside is the complexity of managing multiple incentive options, which can increase the administrative burden on organizers. Additionally, offering a choice of incentives may lead to decision fatigue for ideators, especially if there are too many options to choose from. This could result in some ideators opting out of the contest altogether. Furthermore, there is a risk of incentive-preference mismatch, where ideators may choose an incentive that does not actually motivate them, leading to lower quality submissions. Lastly, offering a choice of incentives may introduce bias if certain groups of ideators are more likely to choose one type of incentive over another, potentially skewing the results of the contest.

How might the findings on incentive preferences and choice apply to other types of open innovation initiatives beyond crowdsourcing contests?

The findings on incentive preferences and choice can be applied to other types of open innovation initiatives beyond crowdsourcing contests by emphasizing the importance of understanding and catering to participants' motivations. In any open innovation initiative, offering a choice of incentives can help to increase engagement and motivation among participants. By providing a menu of incentive options that align with diverse preferences, organizers can create a more inclusive and effective innovation process. Additionally, considering the market context of the initiative, whether it is for-profit or non-profit, can help to tailor the incentives to the specific goals and motivations of the participants. Overall, the insights from this research can inform the design of incentive structures in various open innovation initiatives to optimize participant engagement and idea quality.