Information sharing and product co-creation on crowdsourcing platform

Many crowdsourcing platforms co-create the final products using their base products and artists’ designs. When submitting her design, an artist faces uncertainty about how much consumers like her design style. The platform often collects style popularity information through direct or indirect ways. This paper examines whether the platform should share the popularity information with artists and how such information sharing affects the platform’s profit, the artists’ payoff, consumer welfare, and social welfare. When base product quality is exogenous and artists’ designs are endogenous, whether and when the platform should share information with the artists depend on two factors: the level of price competition among artists and the platform’s marginal cost. When price competition is sufficiently weak (strong), the platform benefits from sharing popularity information if its marginal production cost is very low or very high (very high). Artists at an aggregate level benefit from such information sharing; consumer welfare and social welfare may or may not benefit from it. Moreover, when both base quality and design styles are endogenous, the platform shares popularity information if price competition is weak and production is highly efficient or inefficient. In this case, information sharing leads to either lower or higher base quality. We further extend the main model to allow partial information sharing and discuss the robustness of our results with alternative model setups.