Abstract
We investigate whether piece-rate and competitive incentives affect creativity, and if so, how the incentive effect depends on the form of the incentives. We find that while both piece-rate and competitive incentives lead to greater effort relative to a base-line with no incentives, neither type of incentives improve creativity relative to the base-line. More interestingly, we find that competitive incentives are in fact counter-productive in that they reduce creativity relative to base-line condition. In line with previous literature, we find that competitive conditions affect men and women differently: whereas women perform worse under competition than the base-line condition, men do not.
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Notes
Out of the 8 × 7/2 = 28 between rater correlations, 23 were positive and significant at least within the 10 % confidence level, and the remaining 5 were positive but not significant.
Alternate ways of aggregating the creativity scores, including normalizing each individual rater’s scores, and then averaging these normalized ratings yields identical results.
We thank a reviewer for pointing out that the participants do not get feedback in the no incentive conditions (compared to the incentive conditions where participants can use the payment to infer their own score), and that this could reduce motivation. Thus, it is interesting that despite this possible lower motivation, the creative output in the no incentive condition might be higher compared to the incentive conditions.
In the competition condition, only the winners learn their creativity score. We thank a reviewer for pointing out that this could lead to lower motivation in the competition treatment relative to the piece-rate one, and could be one explanation for the difference in creativity scores.
For the case of unlimited time, in the test between base-line and piece rate, the ratio of variances is 2.45 (F = 2.44, num df = 45, denom df = 40, p < 0.01). For unlimited time, in the test between base-line and competition, the ratio of variances is 1.95 (F = 1.95, num df = 45, denom df = 42, p = 0.03). For the case of limited time, in the test between base-line and piece rate, the ratio of variances is 1.96 (F = 1.95, num df = 44, denom df = 40, p = 0.03). For the case of limited time, in the test between base-line and competition, the ratio of variances is 2.56 (F = 2.56, num df = 44, denom df = 40, p < 0.01).
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Erat, S., Gneezy, U. Incentives for creativity. Exp Econ 19, 269–280 (2016). https://doi.org/10.1007/s10683-015-9440-5
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DOI: https://doi.org/10.1007/s10683-015-9440-5