NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Managing Innovation in a Crowd

Daron Acemoglu, Mohamed Mostagir, Asuman Ozdaglar

NBER Working Paper No. 19852
Issued in January 2014
NBER Program(s):PR

Crowdsourcing is an emerging technology where innovation and production are sourced out to the public through an open call. At the center of crowdsourcing is a resource allocation problem: there is an abundance of workers but a scarcity of high skills, and an easy task assigned to a high-skill worker is a waste of resources. This problem is complicated by the fact that the exact difficulties of innovation tasks may not be known in advance, so tasks that require high-skill labor cannot be identified and allocated ahead of time. We show that the solution to this problem takes the form of a skill hierarchy, where tasks are first attempted by low-skill labor, and high-skill workers only engage with a task if less skilled workers are unable to finish it. This hierarchy can be constructed and implemented in a decentralized manner even though neither the difficulties of the tasks nor the skills of the candidate workers are known. We provide a dynamic pricing mechanism that achieves this implementation by inducing workers to self select into different layers. The mechanism is simple: each time a task is attempted and not finished, its price (reward upon completion) goes up.

download in pdf format
   (352 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w19852

Users who downloaded this paper also downloaded* these:
Acemoglu, Akcigit, and Celik w19894 Young, Restless and Creative: Openness to Disruption and Creative Innovations
Acemoglu w20060 Localized and Biased Technologies: Atkinson and Stiglitz's New View, Induced Innovations, and Directed Technological Change
Acemoglu, Gallego, and Robinson w19933 Institutions, Human Capital and Development
Acemoglu, Autor, Dorn, Hanson, and Price w19837 Return of the Solow Paradox? IT, Productivity, and Employment in U.S. Manufacturing
Gentzkow, Shapiro, and Stone w19880 Media Bias in the Marketplace: Theory
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us