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Sociology Colloquia: Susanne Neckermann - Incentives and Creativity: Tournaments and Reciprocity Across Simple and Creative Tasks

Wanneer:do 24-04-2014 15:30 - 16:45

Susanne Neckermann (Eramus Universiteit Rotterdam): Incentives and Creativity: Tournaments and Reciprocity Across Simple and Creative Tasks

Many jobs in knowledge-based economies involve non-routine tasks that require creativity. This raises the question of how to incentivize creative performance. There is a large literature that documents positive effects of rewards on simple tasks. However, a different strand of the literature suggests that rewards may be detrimental for tasks that are intrinsically motivating like creative tasks. This paper reports the results from a real-effort lab experiment with 750 subjects that studies the impact of two different types of financial incentives (noncontingent gift or tournament prize) on creative as well as purely effort-based performance. This allows us to study the effectiveness of financial rewards on creative performance and to investigate whether the effectiveness depends on the performance contingency of the reward and on the nature of the task. Our results show that routine as well as creative task performance significantly increase under the tournament scheme and, hence, that performance-contingent rewards trigger creativity effectively. In contrast, a noncontingent gift triggers reciprocity of subjects only in the simple task while creative performance is not affected. This suggests that the effectiveness of gifts depends on the nature of the task. We discuss implications for economic theory as well as for workplace management.

From Sept 1, 2013, Susanne is assistant professor at the Department of Economics at the Erasmus University Rotterdam. She received her PhD in economics from the University of Zurich, Switzerland and was a postdoctoral fellow at the ZEW and the University of Mannheim, Germany. Her research focuses on the effects of nonfinancial incentives in the workplace such as awards, praise and meaning of work, as well as on instruments to foster student achievement. Her work has appeared in the American Economic Journal: Microeconomics and the Journal of Socio-Economics.