Reward Size, Ability Distribution and Incentive Effects of Crowdsourcing: a model analysis on All-Pay Auctions

• 1、School of Economy and Trade of Hunan University, Changsha 410079
• 2、 Hunan Key Laboratory of Logistics Information and Simulation Technology, Changsha 410079

Abstract：Crowdsourcing brings together crowdwisdom to realize open innovation. However, commercial practice of many crowdsourcing sites shows that the variations of users\' abilities and submission quality are restricting its development. To explore the incentive effects of reward size and user groups\' ability distribution on crowdsourcing participation and submission quality. We build a single-prize crowdsourcing model in a simultaneous all-pay auction under incomplete information. We find that: Firstly, users\' optimal bidding strategies depend on their own abilities in all-pay context. Secondly, user groups\' heterogeneity determines the incentive effects of crowdsourcing. A higher reward induces significantly more participation and higher submission quality when the abilities of user group vary greatly. On the contrary, a higher reward decreases participation and submission quality. Lastly, depending on the variation of user groups\' ability distribution, the incentive effect may show different characteristics in different stages. We provide a unique enlightenment for the operation of crowdsourcing sites: participation and submission quality can not be achieved at the same time, trade-offs must be made to achieve optimal incentives.

Keywords： crowdsourcing, reward size, ability distribution, incentive effects, all-pay auctions