We argue that under certain circumstances crowdsourcing transforms distant search into local search, improving the efficiency and effectiveness of problem solving. Under such circumstances a firm may choose to crowdsource problem solving rather than solve the problem internally or contract it to a designated supplier. These circumstances depend on the characteristics of the problem, the knowledge required for the solution, the crowd, and the solutions to be evaluated.
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Afuah et al. (2012) studied this question.
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