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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.
Afuah et al. (Tue,) studied this question.
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