Tuesday, March 05, 2013

Individual Creativity, Ex-ante Goals and Financial Incentives


Creativity is a complex and multi-dimensional phenomenon that has hardly been considered by economists, despite a great deal of economic importance. This paper presents a series of experiments where subjects face creativity tasks where, in one case, ex-ante goals and constraints are imposed on their answers, and in the other case no restrictions apply. The effects of financial incentives in stimulating creativity in both types of tasks is then tested, together with the impact of personal features like risk and ambiguity aversion. Our findings show that, in general,financial incentives affect “in-box” (constrained) creativity, but do not facilitate “blue sky”(unconstrained) creativity. However, in the latter case incentives do play a role for ambiguity averse agents, who tend to be significantly less creative and seem to need extrinsic motivation to exert effort in a task whose odds of success they don’t know. We do find that measures of creative style, sensation-seeking preferences, and past involvement in artistic endeavors are related to our creativity score, but do not find any difference across gender for either form of creativity.

Source: Departmental Working Papers, Department of Economics, UCSB, UC Santa Barbara

Download full pdf publication:  Individual Creativity, Ex-ante Goals and Financial Incentives

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