Collective vs. Expert Rationality for Evaluation of New Technologies in Crowdsourcing Initiatives

As firms open the innovation process to the contribution of large groups of users and experts, the process of idea generation benefits from an increased volume and variety of inputs. This implies also an escalation of the complexity of idea screening and selection. Idea markets assist managers in this task by offering a collective assessment of the quality of ideas. This paper investigates to what extent the judgement of markets and experts overlaps. We take as our
empirical case an internal idea competition launched by a multinational company operating in a science-based industry. The study shows that experts? appraisal is substantially aligned with the outcome of the idea market. However, while inventions of senior employees tend to be better received by experts, the market appreciates more ideas for which the inventor provides rich information. Inventions that attract participants? comments tend to be better rewarded in both evaluation systems.