Creativity and Financial Incentives (original) (raw)

Individual Creativity, Ex-ante Goals and Financial Incentives

2013

Abstract: Creativity is a complex and multi-dimensional phenomenon that has hardly been considered byeconomists, despite a great deal of economic importance. This paper presents a series ofexperiments where subjects face creativity tasks where, in one case, ex-ante goals and constraintsare imposed on their answers, and in the other case no restrictions apply. The effects of financialincentives in stimulating creativity in both types of tasks is then tested, together with the impactof personal features like risk and ambiguity aversion. Our ...

A survey on experimental elicitation of creativity in economics

2021

The interplay between individual creative ability and the way to enhance it – through monetary and nonmonetary incentives – is an issue with tremendous potential for economic analysis. In this survey, we dwell into the issue by focusing on the methodological advantages of economic experiments. We provide a review of the literature in experimental economics on creativity, identifying six main directions of analysis. Namely, the impact on creativity of: (1) low vs high monetary incentives, (2) the interplay of monetary incentives and tasks, (3) within-group competition, (4) within-group cooperation, (5) cultural factors, and (6) non-monetary social incentives. In the spirit of a “meta-study,” we classify the works in our review not only according to the aforementioned research questions, but also disentangling by the type of creative task that the experimental subjects face, the way in which creativity is assessed, and other key features of standard experimental procedures in economic...

Quantity, Quality and Originality: The Effects of Incentives on Creativity

2016

We introduce a novel experimental design in which creativity is incentivized and measured along three dimensions: quantity, quality and originality of ideas. We implement piece rate incentives for quantity alone, quantity in combination with quality and quantity in combination with originality and compare the results to a baseline with a fixed wage. We find that incentives significantly affect the quantity and average quality of ideas, but not the average originality. Incentives for both quantity and originality perform best in fostering innovative ideas.

Understanding the motivations for creative tasks with group-based incentive systems

Over recent years much attention has been devoted to work motivation in firms and organizations, in relation to the introduction of new incentive systems. The literature emphasizes two aspects of motivation : the intrinsic and extrinsic dimen-sions. This paper explores the issue of motivation for creative tasks. We discuss the potential tensions between incentive systems and the work motivations of groups of inventors through a case study of a French high tech firm. We then propose a model to characterize the impact of the interactions between intrinsic and extrinsic motivation on the dynamics of knowledge creation. Numerical simulations of the model suggest that crowding out or crowding in effects can occur with different distributions of skills and interaction structures. 1 The research for this paper was supported by the ANR (French National Research Agency) project INAPOR (Incitations et Apprentissage dans les Organisations ; Incentives and Learning inside Organizations). We wan...

Self-set salaries and creativity

Journal of Business Economics, 2020

Organizations frequently try to incentivize employees to develop highly creative solutions. In this study, we examine self-set salaries as a specific type of incentive design. We investigate whether self-set salaries affect employees’ motivation and overall (creative) performance. Moreover, because self-set salaries potentially risk opportunistic employee behavior, we consider the effect of the observability of peer performance on employees’ level of self-set salaries. Using a laboratory experiment, we hold the average employee compensation constant and demonstrate that, in comparison with fixed-pay contracts, self-set salaries increase the quantitative performance in creative tasks without affecting the average creativity. However, we do not find significant differences between the amount of individuals’ self-set salaries with observability of peer performance and the amount for individuals without the chance to observe peer performance. Our findings are important for firms that re...

Intrinsic vs. Extrinsic Motivators on Creative Collaboration: The Effect of Sharing Rewards

2019

Charness and Grieco (2019) have experimentally shown that financial incentives have a positive impact on individual creativity, but only in the case of “close” creativity, i.e., when there are constraints to the creative task that a subject has to accomplish. In this paper, we build on the same “close” creativity assignments of Charness and Grieco (2019) and analyze with undergraduate students and with experts in creativity the interplay between monetary incentives and group cooperation in creative assignments. We introduce a novel model of intrinsic vs. extrinsic motivation to group collaboration in creativity and run a theorydriven experiment to test our experimental hypotheses on the crowding out of intrinsic motivation due to extrinsic motivation to group creativity. We find more creativity in the group than in the individual treatment, apart when there are explicit monetary incentives to co-working (sharing ideas) in the creative assignment. Therefore, while Charness and Grieco...

How Do Financial Constraints Affect Creativity?

Journal of Product Innovation Management, 2013

This article investigates the effects of financial constraints on the outcome of different types of creative tasks such as product ideation and product repair. Four experimental studies examine the effect of financial constraints on creativity of the outcome of a product ideation task, and compare the effect of financial constraints with the effect of another type of constraint (i.e., input restrictions) on creativity of products ideated and on the amount of resources invested in the development of the creative solution. Furthermore, these studies explore the type of creative process ignited by financial constraints and analyze the effect of financial constraints in interaction with an individual difference such as novelty seeking, which embraces more remote determinants of creative performance, on the creativity of the outcomes to a product ideation task, as well as on the creativity of the outcomes to a more constrained task such as repairing an existing product.

The Effect of Incentives and Leadership Styles on Creative Performance

Journal of Indonesian Economy and Business, 2021

Introduction/Main Objectives: This study investigates whether the type of incentives offered and leadership styles interact to affect creative performance. Background Problems: Creativity is highly needed by companies to survive in a volatile business environment. Prior research found that management control systems and the leadership style were able to stimulate creativity. It is still unclear which type of incentives and leadership styles are able to stimulate creativity. Therefore, this research proposes a research question, what kind of management control systems and leadership style can improve creative performance? Novelty: This research focuses on comparing monetary and non-monetary incentives, based on competition, to produce the most creative ideas, but empirical studies into the context of creativity are still limited. Furthermore, this study investigates two different leadership styles and it sheds light on the fact that the leadership styles needed in a creative environm...