document: Money , glory and cheap talk : analyzing strategic behavior of contestants in simultaneous crowdsourcing contests on TopCoder.com Crowdsourcing is a new Web phenomenon , in which a firm takes a function once performed in-house and outsources it to a crowd , usually in the form of an open contest . Designing efficient crowdsourcing mechanisms is not possible without deep understanding of incentives and strategic choices of all participants . This paper presents an empirical analysis of determinants of individual performance in multiple simultaneous crowdsourcing contests using a unique dataset for the world 's largest competitive software development portal : TopCoder.com . Special attention is given to studying the effects of the reputation system currently used by TopCoder.com on behavior of contestants . We find that individual specific traits together with the project payment and the number of project requirements are significant predictors of the final project quality . Furthermore , we find significant evidence of strategic behavior of contestants . High rated contestants face tougher competition from their opponents in the competition phase of the contest . In order to soften the competition , they move first in the registration phase of the contest , signing up early for particular projects . Although registration in TopCoder contests is non-binding , it deters entry of opponents in the same contest ; our lower bound estimate shows that this strategy generates significant surplus gain to high rated contestants . We conjecture that the reputation + cheap talk mechanism employed by TopCoder has a positive effect on allocative efficiency of simultaneous all-pay contests and should be considered for adoption in other crowdsourcing platforms .
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