In an experimental idea generation context, we study the effect of input incentives, which reward time invested to generate ideas, and output-based incentives, which reward the number of innovative ideas generated, compared to simple fixed wages. Overall, we find that both input and output incentives increase the average number of innovative ideas to a comparable extent. Under input incentives, this increase is due to a rise in effort duration, i.e., an increase in the time spent generating ideas. For output incentives, this increase is due to both heightened effort duration and effort intensity, i.e., the number of ideas generated per unit of time. The optimal incentive scheme seems to depend on the context. We find that output incentives result in innovative ideas at lower costs. However, output incentives also cause a shift in the types of ideas generated, with individuals focusing on less time-intensive ideas. (Joint work with Kay Blaufus and Kevin Piehl)
Contact person: Svenja Friess
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