The Impact of Collaborative Incentives on Ideation Behavior : Evidence from a Laboratory Experiment

Within this paper, we examine the role of collaborative incentives in idea contests. By developing a theoretical model and using a 2x2 between subject game theoretic experiment, we analyze how a competitive/collaborative setting, as well as performance-based/flat compensation, influence consumers in their ideation activity and elaboration effort. Contrary to prior literature and current firm practices which emphasize the important role of the competitive character of idea contests, we find that a collaborative setting increases participants’ effort as well as the interaction among participants. In particular, we find that participants in this setting allocate more time to improving the ideas of other participants, leading to a higher overall performance of the idea contest