Want to join? Enhancing team performance in innovation crowdsourcing contests through effective incentive design

The evolution of internet and web technologies has given rise to innovation crowdsourcing platforms, which facilitate the externalization of complex problems to the crowd, leveraging the collective wisdom of individuals with heterogeneous characteristics for problem solving (Estellés-Arolas & González-Ladrón-De- Guevara, 2012). Frequently, companies engage in innovation crowdsourcing (ICS) on the assumption that problems can be decomposed, solved independently, and then combined to form valuable solutions. However, previous research has provided evidence that many innovation problems require interaction between different knowledge components (Natalicchio et al., 2017; Nickerson & Zenger, 2004). This has raised the question of the potential benefits of facilitating simultaneous competitive and collaborative behaviors between contestants. It is well-documented that collaborative efforts engender more creative and original solutions, thanks to the confrontation of different perspectives, skills and experiences (Leonard-Barton & Swap, 1999). Teams also exhibit enhanced project execution efficiency by distributing tasks and extending mutual support, thereby surmounting obstacles more effectively (Mathieu et al., 2008). Therefore, platforms increasingly incorporate communication tools that enable the development of interconnected networks through discussion forums, private chats, and solution sharing spaces. Despite the potential benefits, teamwork might not be as prevalent on these platforms due to inherent challenges, including high coordination costs linked to asynchronous communication that leads to prolonged response times (Faullant et al., 2017), as well as disparities in contributions fostering behaviors such as free riding (Lazear & Shaw, 2007). Moreover, incentives typically aim to attract participants rather than foster desirable behaviors like collaboration. To date, the impact of platform managers on team structure and resource allocation via incentive systems remains largely unexplored. To fill this knowledge gap, we examine the influence of the incentive system on the structure and resource distribution of self-organized teams competing in ICS contests. Specifically, the two research questions that motivate our research are: (1) What is the influence of monetary and non-monetary incentives on team structure and characteristics? (2) What characteristics of teams predict their performance in ICS contests?