Ross School of Business
University of Michigan
701 Tappan Ave. R5316
Ann Arbor, MI 48109-1234
NBER Working Papers and Publications
|January 2014||Managing Innovation in a Crowd|
with Daron Acemoglu, Asuman Ozdaglar: w19852
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 im...