Crowdsourcing has many fields of application like idea generation, technical problem-solving, predicting trends and also idea or product evaluation. Consequently, crowdsourcing has been gaining more and more interest in recent years.

But what exactly is crowdsourcing? Crowdsourcing consists of the words "crowd" and "outsourcing" and means to outsource tasks to an (unknown) crowd via the internet (Howe 2006). There are several reasons why organizations should use crowdsourcing. To begin with, users are a very good source of innovation because they can design products based on their specific needs (von Hippel 2010). Furthermore, the “wisdom of the crowds” plays a key role in the success of crowdsourcing.

In the beginning of the 20th century, Sir Francis Galton was wondering how accurately the crowd was able to estimate the weight of an ox. Surprisingly, the crowd estimated the weight almost perfectly (Galton, 1907). Thus, more than 100 years ago there was already anecdotal evidence that a group of amateurs can perform better than experts. This phenomenon is called wisdom of the crowds and means that the many are smarter than the few (Surowiecki 2004). In fact, large crowds perform better than small groups of experts in solving problems. Academics have shown that even trained experts possess limited cognitive capacity and knowledge which in turn often lead to a biased evaluation.

Thus, the wisdom of the crowds is the foundation and main advantage of crowdsourcing. Due to the internet, crowdsourcing can be used for various context nowadays: 

• Evaluating Tasks: Reviews on platforms like Amazon or TripAdvisor are one kind of evaluation of the products/services.
• Sharing Tasks: For example, the content on Napster or YouTube is created and provided by the users and then shared among them.
• Networking: Under the right circumstances (e.g. technical feasibility via the internet), the crowd is perfectly capable of building and using networks.
• Artifact Building Tasks: The most famous example is Wikipedia, an encyclopedia created and managed by users. Another well-known example would be Linux.
• Execution Tasks: The NASA employs amateur astronomers for finding extraterrestrial life on other planets.

Crowdsourcing is a mighty and versatile tool that harnesses the wisdom of the crowds. Since it can be used in many fields of application, it will be exciting to see what else crowdsourcing is going to enable.

However, the limitations of crowdsourcing must not be overlooked. In crowd evaluations for example, strategic voting is a major problem. On the one hand, there is the possibility for hidden self-promotion by up-voting own contributions, products or services. On the other hand, there is the possibility to sabotage the competition by down-voting their contributions. Both types of strategic voting (sabotage and self-promotion) are observable in field studies and lead to various problems which will be discussed in another blog post in more detail (Riedl et al., 2019).

All in all, crowdsourcing is a promising new way to solve problems efficiently with the help of the crowd. However, the limitations should not be ignored. A careful evaluation of the risks is very important and therefore one part of the current research project.

References:

Galton, F. (1907). Vox Populi. Nature, 75, 450–451.

Howe, J. (2006). The Rise of Crowdsourcing. Wired Magazine, 14(6), 1–4. http://www.wired.com/wired/archive/14.06/crowds_pr.html

Surowiecki, J. (2004). The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations. Doubleday.

von Hippel, E. (2010). Open User Innovation. In Handbook of The Economics of Innovation (Vol. 1, pp. 411–427). North-Holland.

Riedl, C., Grad, T., & Lettl, C. (2020). Strategic Behavior in Contests with Ability Heterogeneous Contestants: Evidence from Field Data. Available at SSRN 3387056.