Crowdsourcing Applications of Voting Theory Daniel Hughart
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Crowdsourcing Applications of Voting Theory Daniel Hughart 5/17/2013 Most large scale marketing campaigns which involve consumer participation through voting makes use of plurality voting. In this work, it is questioned whether firms may have incentive to utilize alternative voting systems. Through an analysis of voting criteria, as well as a series of voting systems themselves, it is suggested that though there are no necessarily superior voting systems there are likely enough benefits to alternative systems to encourage their use over plurality voting. Contents Introduction .................................................................................................................................... 3 Assumptions ............................................................................................................................... 6 Voting Criteria .............................................................................................................................. 10 Condorcet ................................................................................................................................. 11 Smith ......................................................................................................................................... 14 Condorcet Loser ........................................................................................................................ 15 Majority .................................................................................................................................... 16 Independence of Irrelevant Alternatives .................................................................................. 17 Consistency ............................................................................................................................... 21 Participation .............................................................................................................................. 21 Favorite Betrayal ....................................................................................................................... 23 Monotonicity ............................................................................................................................ 26 Pareto Efficiency ....................................................................................................................... 28 Arrow’s Impossibility Theorem ..................................................................................................... 29 Voting Systems ............................................................................................................................. 31 Plurality ..................................................................................................................................... 34 Approval .................................................................................................................................... 38 Range ........................................................................................................................................ 41 Borda Count .............................................................................................................................. 43 Approval Preference Hybrids .................................................................................................... 46 Random Ballot .......................................................................................................................... 49 Conclusions ................................................................................................................................... 50 Glossary ........................................................................................................................................ 53 Bibliography .................................................................................................................................. 54 2 Introduction The ever-increasing interconnectivity of the information age has provided firms, organizations which trade goods and services to consumers, with greater access to a previously underutilized source of labor and research, the general public. The act of disseminating tasks to the large, undefined networks of people has recently been defined as crowdsourcing. An important subset of crowdsourcing practices, crowd voting, involves a firm collecting information through some form of a vote. The applications of crowd voting, including product reviews and cheap market research among others, are manifold. Crowd voting has seen a lot of use in recent years as a marketing mechanism. In 2011, as Toyota first launched multiple lines of their Prius model, they asked the public to decide on the proper plural term for Prius.1 In their annual “Crash the Super bowl” campaign, Doritos uses crowd voting to select a winner from their crowd sourced advertisements to air during the Super Bowl.2 These and a number of other uses of crowd voting poll the public about something they may find interesting, though have no stake in. This thesis is more concerned with instances of crowd voting where consumers are directly affected, if minimally, by the outcome of the vote. This often occurs through the potential release of a new product. If a consumer enjoys a product, they derive some utility by the availability of that product. Utility, in the economic meaning of the word, is a quantified but incomparable measure of an individual’s satisfaction. There have been a number of campaigns which employ voting in order to select an alternative for production. In early 2012, Samuel Adams used social networking to have its consumers vote in sequence to determine each aspect of a beer they would release for the South by Southwest festival. Later in the same year, the 1 (Toyota) 2 (Frito-Lay) 3 Australian division of Domino’s pizza held a series of votes to determine the crust, sauce, and toppings of a pizza that they then added to their menu.3 On a weekly basis, NBA.com uses voting to determine what game will air the following Tuesday on NBAtv.4 On multiple occasions and in a variety of countries around the world, Pepsi-co brands Lay’s and Mountain Dew have released a small set of new flavors, and had consumers vote to keep a single flavor in production. Dubbed “Do us a Flavor,”5 and “DEWmocracy”6 respectively, these promotions are quintessential examples of crowd voting in which both the firms and voters have distinct interests in the winners. This is because both are single “elections” held to determine a single winner from a set of alternatives that the voter has ample opportunity to be familiar with. Due to the food centric nature of most of these instances of crowd voting, I will occasionally use the term flavor to denote an alternative in such a promotion. Each of these crowd voting marketing examples use plurality voting, as do most such campaigns. My discussion will focus around this very specific form of crowd voting, which I will refer to as a promotional election. I define a promotional election as a firm surrendering some production decision to the public at large through an actively publicized voting mechanism. This term is used to capture both the promotional and electoral elements of these marketing campaigns. The term promotional is used in both the sense of advertising a brand, as well as encouraging a positive customer relationship and goodwill through interaction. Ideally, promotional elections make voters feel as though their input is valued by the brand, and build excitement about that brand. For example, Mountain Dew’s marketing director has asserted that 3 (DominosAustralia) 4 (NBATVfannight) 5 (Frito-Lay North America) 6 (Mountain Dew) 4 “[DEWmocracy] contributes to our growth. ... The Dew fan is excited about engaging with new offerings from Dew. But it also attracts new people into the Dew fan base that say, 'hey, this is something really interesting, let me give it a try.”7 There is some evidence that this is the case. As an interactive social media marketing campaign, DEWmocracy not only involved and inspired loyalty in the brand’s 726 thousand Facebook fans and 19 thousand Twitter followers8, but helped the brand increase sales volume in a shrinking market.9 Many other promotional elections have been similarly successful. The firm’s choice of voting system has a distinct effect on these promotional gains, particularly customer loyalty. The more voters perceive a sense of efficacy, the more goodwill and loyalty the campaign can potentially generate. The term election refers to the social choice format of the campaign, using voters to make some decision for the firm. The vote itself conveys valuable information about the participating consumers. Though the magnitude of promotional gains are likely much larger, the ability of promotional elections to double as market research is also valuable. However, if the process of crowd voting is too explicit about its market research function, it runs the risk of diminishing the consumer’s sense of involvement, and thus the promotional gains. My thesis is concerned with the question of whether or not firms utilizing a promotional election campaign have incentive to use some voting system other than plurality voting. In the context of political elections the shortcomings of plurality voting have been evident as early as the late 18th century: “If there are more than two candidates, and none of them obtains more than half the votes, this method can in fact lead to error."10