Risk Taking in Online Crowdsourcing Tournaments

Rankings and tournaments are often used to incentivize task completion and participation in online innovation and design contests and prediction markets. One of the main challenges for platform operators is to encourage high quality contributions and effort. In this study we illustrate that in such tournaments, the participants' ranks interfere with risk taking behavior. We present an online experiment accompanying the FIFA World Cup 2014, considering the interplay of different tournament modes (individual and team rankings), the relative rank, tournament progress, and risk taking. We find that subjects take higher risk as the tournament progresses, where this increase is stronger for subjects competing individually, compared to those competing as teams.