Crowdsourcing with endogenous entry

Abstract

We investigate the design of mechanisms to incentivize high quality outcomes in crowdsourcing environments with strategic agents, when entry is an endogenous, strategic choice. Modeling endogenous entry in crowdsourcing mar- kets is important because there is a nonzero cost to making a contribution of any quality which can be avoided by not participating, and indeed many sites based on crowdsourced content do not have adequate participation. We use a mech- anism with monotone, rank-based, rewards in a model where agents strategically make participation and quality choices to capture a wide variety of crowdsourcing environments, ranging from conventional crowdsourcing contests with mon- etary rewards such as TopCoder, to crowdsourced content as in online Q&A forums. We begin by explicitly constructing the unique mixed- strategy equilibrium for such monotone rank-order mech- anisms, and use the participation probability and distribu- tion of qualities from this construction to address the ques- tion of designing incentives for two kinds of rewards that arise in the context of crowdsourcing. We first show that for attention rewards that arise in the crowdsourced content setting, the entire equilibrium distribution and therefore ev- ery increasing statistic including the maximum and average quality (accounting for participation), improves when the rewards for every rank but the last are as high as possible. In particular, when the cost of producing the lowest possi- ble quality content is low, the optimal mechanism displays all but the poorest contribution. We next investigate how to allocate rewards in settings where there is a fixed total reward that can be arbitrarily distributed amongst participants, as in crowdsourcing contests. Unlike models with exogenous entry, here the expected number of participants can be increased by subsidizing entry, which could potentially improve the expected value of the best contribution. However, we show that subsidizing entry does not improve the expected quality of the best contribution, although it may improve the expected quality of the average contribu- tion. In fact, we show that free entry is dominated by taxing entry-making all entrants pay a small fee, which is rebated to the winner along with whatever rewards were already as- signed, can improve the quality of the best contribution over a winner-take-all contest with no taxes.