Michael Fitzgerald in Harvard Magazine:
…His research got a real-world boost when he began teaching at Harvard Business School (HBS). After he presented a case study on crowdsourcing at an HBS executive-education program, one of the attendees—NASA’s chief medical officer—asked whether such a contest could help the agency. “Give me a test case,” Lakhani responded. NASA asked him to come up with an algorithm that would identify the ideal contents for a space emergency medical kit. Using Topcoder, a crowdsourcing company that brings random groups of developers and designers together to work on problems, and $25,000 in prize money, the contest led to a solution that worked better and faster than one NASA had developed internally. That led to the creation of the NASA Tournament Lab, which added economists to help design effective contests, as well as post-docs in physics and computer science to tackle the full range of problems NASA wanted to solve. In six years, the lab has run hundreds of competitions on Topcoder, addressing challenges ranging from solar-flare detection to the counting of asteroids. Almost all have produced effective code for the agency. The Tournament Lab also addresses a crucial problem with competitions: lack of empirical evidence for why they work. Lakhani notes that a crop of good textbooks explains how to design competitions and other theoretical aspects of competitions, but “What’s been missing is field evidence” of what—apart from sports or internal contests—motivates crowds to solve problems. The lab has provided answers. People form crowds to solve problems for three reasons, Lakhani says: extrinsic benefits (improved professional profile or rewards like cash); intrinsic benefits (it helps solve a problem, or it’s fun); and pro-social benefits (participants like being part of something bigger than themselves that makes the world a better place).
More here.