Firms, Markets and Crowds: Information and Economic Organizing in the Digital Economy

The rise and prominence of platform-based organizations in recent years has attracted tremendous research interest by management and economics scholars. We focus on crowdsourcing, a particular type of platform-based form of organizing. We first inquire into the information efficiency properties of crowdsourcing, exploring why and how the underlying mechanisms can enable it to be more efficient than alternative organizational forms in organizing economic activities. We then emphasize the role of the firm as market designer as well as orchestrator of market resources in bringing about such efficiencies. We argue that the concept of firm-designed market represents a distinct institutional arrangement, demonstrating a new gain to management that is structured not around authority in producing orders but instead around orchestrating the market mechanism.