Abstract
Crowdsourcing is becoming an increasing popular tool for new idea generation for firms but the number of ideas generated often decline over time and the implementation rates are very low. Critics of crowdsourcing often attribute these observations to users’ restrictive view about firms’ products leading to contribution of mainly niche ideas, and limited knowledge about firms’ cost structure leading to contribution of mostly infeasible ideas. Using a rich dataset obtained from Ideastorm.com, which is a crowdsourcing website affiliated with Dell, we find that individuals tend to significantly underestimate firm's costs of implementation of their ideas but overestimate the potential of their ideas in the beginning of the their idea contribution history. However, individuals learn very quickly about their abilities to come up with high potential ideas but the learning regarding the firm's cost structure is quite slow. As a result of the learning process, contributors of low potential ideas eventually drop out, and high potential idea contributors remain active.
Recommended Citation
Huang, Yan; Singh, Param; and Srinivasan, Kannan, "CROWDSOURCING “BLOCKBUSTER” IDEAS: A DYNAMIC STRUCTURAL MODEL OF IDEATION" (2011). ICIS 2011 Proceedings. 19.
https://aisel.aisnet.org/icis2011/proceedings/economicvalueIS/19
CROWDSOURCING “BLOCKBUSTER” IDEAS: A DYNAMIC STRUCTURAL MODEL OF IDEATION
Crowdsourcing is becoming an increasing popular tool for new idea generation for firms but the number of ideas generated often decline over time and the implementation rates are very low. Critics of crowdsourcing often attribute these observations to users’ restrictive view about firms’ products leading to contribution of mainly niche ideas, and limited knowledge about firms’ cost structure leading to contribution of mostly infeasible ideas. Using a rich dataset obtained from Ideastorm.com, which is a crowdsourcing website affiliated with Dell, we find that individuals tend to significantly underestimate firm's costs of implementation of their ideas but overestimate the potential of their ideas in the beginning of the their idea contribution history. However, individuals learn very quickly about their abilities to come up with high potential ideas but the learning regarding the firm's cost structure is quite slow. As a result of the learning process, contributors of low potential ideas eventually drop out, and high potential idea contributors remain active.