Online Contests for Open Innovation: an Empirical Investigation Preliminary Draft (work-in-progress)

Online contests for open innovation – seekers posting innovation projects to which solvers submit solutions – have been developed into a new online commerce model. While there exists a long stream of research on contests or tournaments, we identify several distinctive characteristics that make real world online contests very different from traditional contests and what was typically assumed in previous studies. We show that these differences have profound impact on contest design and performance. Using real contest data, we identify factors that impact number of solvers in an online contest. Several influential factors that impact number of solvers are identified: award amount, contest duration, difficulty level, number of concurrent competing projects (i.e. competition intensity), market price for other concurrent competing projects, and response time (i.e., time to first submission). We show that higher award, easier task, longer duration, lower competition intensity and higher market price not only lead to faster submission but also contribute to higher number of solvers. Shorter project description, on the other hand, does not increase number of solvers, although it does lead to faster submission. We also find that purely ideation based projects have a larger solver pool than expertise based projects. Projects in different categories also behave differently.