THESIS
2017
vi, 44 pages : illustrations ; 30 cm
Abstract
Firms seek innovation solutions from external sources such as individuals, consumers
and universities. It is critical for these firms to motivate external innovators to deliver
high quality innovations. Online freelancer platforms work as an important channels for
firms to find suitable freelancers to solve their problems. Some leading freelance
platforms use contest to match freelancers with employers. In this research, we
demonstrate that freelancers exhibit free-riding behavior in open contests where
competing submissions are observable. Freelancers borrow ideas from others'
submissions and implement these ideas in their own designs. The behavior is identified
empirically using data collected from a leading freelance platform. It can be shown that
free-riding behavior may ha...[
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Firms seek innovation solutions from external sources such as individuals, consumers
and universities. It is critical for these firms to motivate external innovators to deliver
high quality innovations. Online freelancer platforms work as an important channels for
firms to find suitable freelancers to solve their problems. Some leading freelance
platforms use contest to match freelancers with employers. In this research, we
demonstrate that freelancers exhibit free-riding behavior in open contests where
competing submissions are observable. Freelancers borrow ideas from others'
submissions and implement these ideas in their own designs. The behavior is identified
empirically using data collected from a leading freelance platform. It can be shown that
free-riding behavior may harm a freelancer's incentive by discouraging freelancers to
enter contests late and submit fewer designs. On the other hand, we also find that
employer's feedback provision may improve a freelancer's incentive and alleviate the
negative effect of free-riding behavior on incentive. In addition, submission ratings in
open contests are significantly higher, indicating that employers are more likely to get
satisfactory outcomes in open contests. This finding could explain why some leading
freelance platforms favor open contests on their platforms.
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