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Input versus output incentives in idea generation—An experimental analysis

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  • Blaufus, Kay
  • Piehl, Kevin
  • Schröder, Marina

Abstract

In an experimental idea-generation context, we study the effects of input incentives, which reward the time invested in generating ideas, and output incentives, which reward the number of innovative ideas generated. We find that input incentives increase the time spent generating ideas. Output incentives increase both the time spent and the number of ideas generated per unit of time. Overall, we find that compared to a fixed wage, both input and output incentives increase the average number of innovative ideas generated by individual ideators to a similar extent. However, the effort patterns induced by different incentive schemes appear to be associated with distinct processes of idea generation and characteristics of the resulting ideas. Specifically, input incentives seem to slow down the generation of innovative ideas and output incentives are associated with the generation of less complex ideas.

Suggested Citation

  • Blaufus, Kay & Piehl, Kevin & Schröder, Marina, 2026. "Input versus output incentives in idea generation—An experimental analysis," European Economic Review, Elsevier, vol. 186(C).
    • Handle: RePEc:eee:eecrev:v:186:y:2026:i:c:s0014292126000735
    DOI: 10.1016/j.euroecorev.2026.105329
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    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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