Optimal Information Acquisition and Sharing Decisions: Joint Reviews on Crowdsourcing Product Design

Optimal Information Acquisition and Sharing Decisions: Joint Reviews on Crowdsourcing Product Design

Jizi Li, Xiaodie Wang, Justin Z. Zhang, Longyu Li
Copyright: © 2024 |Pages: 34
DOI: 10.4018/JDM.337971
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Abstract

The acquisition and sharing of reviews have significant ramifications for the selection of crowdsourcing designs before mass production. This article studies the optimal decision of a brand enterprise regarding the acquisition/sharing of crowdsourcing design reviews in a supply chain. The authors consider an analytical model where the brand enterprise can privately acquire the manufacturer's review (MR) of crowdsourcing product designs and choose one of two information-sharing schemes—optional or mandatory sharing—to disclose MR to the key opinion leaders (KOLs), which help them to produce fans' reviews (FR). MR and FR integrate into the joint reviews (JR) that impact prospective consumers' purchase intention. The authors find that mandatory sharing significantly harms the brand enterprise's motivation to obtain MR, yet optional sharing is conducive to boosting JR on crowdsourcing designs. In addition, JR has a ceiling value, implying that excessively high FR and MR could not always enhance the effect of JR on crowdsourcing designs.
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Introduction

Consumers prefer to tailor their products instead of passively adopting a firm’s offerings (Namin et al., 2023). Therefore, constantly launching new customized products is critical for enterprises to meet different individuals’ demands (Ogink & Dong, 2019). Traditionally, enterprises rely on their internal R&D to enhance innovation capabilities and yet shoulder heavy financial burdens. However, mobile Internet and smart devices allow enterprises to obtain cost-saving innovation beyond the organization’s boundary (Chan et al., 2021). One such innovation paradigm is crowdsourcing, through which enterprises seek solutions that appeal to potential users or prospective consumers (Liu et al., 2020). The fundamental goal of crowdsourcing is to solicit innovative ideas by exploiting the collective expertise and wisdom of heterogeneous outside participants in a quick response to customized demands, rather than depending on a limited quantity of internal specified professionals (Liu et al., 2022).

Crowdsourcing has been implemented in both business-to-consumer (B2C) and business-to-business (B2B) markets (Gao et al., 2022). It helps firms effectively embed potential consumers’ ideas into their innovation tasks. For example, with crowdsourcing innovation, Xiaomi, as one of the worldwide leading electronics manufacturers, earned over 5.6 million US dollars in 2018 from its smart products (Li et al., 2019), while Dell also has collected more than 16,000 novel ideas from its customers to sharpen its competitive edge via crowdsourcing innovation since 2010 (Bayus, 2013).

Although crowdsourcing allows firms to meet consumers’ customized needs, it is still challenging to accurately and holistically assess the quality of crowdsourcing designs and ideas due to its online innovation (Li et al., 2021; Pan et al., 2022). To overcome this obstacle, firms encourage fans on crowdsourcing platform to post their reviews (FR) because a considerable number of consumers utilize online reviews from fans or early consumers to make purchase decisions. Meanwhile, the “herd effect” of online comments psychologically boosts consumers’ purchase intentions and weakens their wait-and-see status (Chan et al., 2021).

Typically, consumer reviews are written online after products are purchased or consumed, and they are widely utilized to promote sales in e-commerce, but this kind of consumer review belongs to the after-purchase reviews, unsuitable for before-production crowdsourcing designs (Chen et al., 2020). In contrast, fan reviews in the crowdsourcing setting, submitted before manufacturing crowdsourcing products, aim to assess crowdsourcing design quality, which means FR is an ex-ante online review. Without FR, if the crowdsourcing designs are turned into finished products, they may not precisely match consumers’ customized requirements, leading to consumers’ reluctance to purchase, thus such crowdsourcing is a failure. To avoid such potential risks, some firms, including Xiaomi, have employed the ex-ante FR rather than post-purchase reviews to identify the quality of crowdsourcing designs (Li et al., 2021).

Generally, desirable crowdsourcing design quality would include input by all related members because each member (for example in the supply chain) plays a unique role in reappraising the crowdsourcing designs’ values from various lenses. Specifically, crowdsourcers are in charge of hosting the crowdsourcing activities, and crowdsourcees contribute to creative solutions based on personalized requirements (Piezunka & Dahlander, 2019). Enthusiastic fans assess the proposed crowdsourcing design quality from the perspective of both ease of use and usefulness (Li et al., 2019). Manufacturers produce and comment from the perspective of production cost, manufacturability, ease of making, and recyclability. In this way, crowdsourcers enable a holistic and precise understanding of crowdsourcing quality. Afterward, the most desirable solutions are selected and put into production (Wong et al., 2021); some firms, such as Xiaomi and Suning, capitalize on the ex-ante FR in conjunction with the manufacturer’s review (MR) to judge the crowdsourcing designs before mass production (Li et al., 2021).

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