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Dueling Contests and Platform’s Coordinating Role

Author

Listed:
  • Konstantinos I. Stouras

    (Michael Smurfit School of Business, University College Dublin, Dublin A94 XF34, Ireland)

  • Sanjiv Erat

    (Rady School of Management, University of California, San Diego, La Jolla, California 92093)

  • Kenneth C. Lichtendahl

    (Google, Mountain View, California 94043)

Abstract

Crowdsourcing platforms typically take a passive approach, and they let the competing firms freely design their own contests and allow every solver to self-select and join any of the concurrently running contests. In a model of competing noise-driven contests, we show that the duopoly prize allocation has fewer (but larger) prizes compared with a monopolist contest designer. We also find that contests with firm-chosen budgets and solvers’ endogenous participation create coordination inefficiencies. Thus, platform policies that constrain the competing firms from freely choosing their budgets and offer solvers non-enforceable recommendations toward specific noise-driven contests strictly enhance total welfare. Extending our framework to include arbitrarily correlated ability-driven contests, we highlight the critical role of inter-contest dependence on the efficacy of a platform’s interventions. Specifically, platform nudges to improve solver-contest (mis)matches are welfare enhancing only when the contests are sufficiently related, and allowing solvers to self-sort is appropriate otherwise.

Suggested Citation

  • Konstantinos I. Stouras & Sanjiv Erat & Kenneth C. Lichtendahl, 2025. "Dueling Contests and Platform’s Coordinating Role," Management Science, INFORMS, vol. 71(2), pages 1488-1503, February.
    • Handle: RePEc:inm:ormnsc:v:71:y:2025:i:2:p:1488-1503
    DOI: 10.1287/mnsc.2021.03973
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