Working Paper: NBER ID: w25057
Authors: Daniel P. Gross
Abstract: Though fundamental to innovation and essential to many industries and occupations, individual creativity has received limited attention as an economic behavior and has historically proven difficult to study. This paper studies the incentive effects of competition on individuals' creative production. Using a sample of commercial logo design competitions, and a novel, content-based measure of originality, I find that intensifying competition induces agents to produce original, untested ideas over tweaking their earlier work, but heavy competition drives them to stop investing altogether. The results yield lessons for the management of creative workers and for the implementation of competitive procurement mechanisms for innovation.
Keywords: creativity; competition; innovation; logo design; incentives
JEL Codes: D81; M52; M55; O31; O32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| competition (L13) | design originality (O30) |
| balanced competition (L13) | originality (O30) |
| heavy competition (L13) | overall creative output (A30) |
| competition intensity (L13) | abandonment of contest (D44) |
| high performers facing 50-50 chance (D80) | original work (Y20) |