Incentives, Creativity, and Innovation in Economics Lab Lecture
Explore the impact of incentives on creativity and innovation in the field of economics. Understand the vital role of incentives in stimulating creativity, defining creativity, and differentiating closed versus open tasks. Discover how incentives matter, particularly in closed tasks, and the importance of recognizing creativity in society.
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ECONOMICS LAB Lecture 3: Incentives, prices and markets Prof.Daniela Grieco Departmentof Economics email:daniela.grieco@unibocconi.it
Incentives and innovation Innovation and creativity are mysteriousprocesses . But, no matter what needed to get to them, economists are reasonably sure that incentives matter (Scotchmer, 2004, Innovation and incentives ) Arrow (1962): inventions are information, and information is a public good. High fixed production costs and low imitation costs. Which is the optimal incentives scheme? Mainly patents, but also prizes and research contracts (Wright, AER 1983; Gallini and Scotchmer, 2002) 2 2
Creativity Creativity is a vital input into the well-being of society: Taste for creativity (the interest, enjoyment, satisfaction, and challenge of creativity itself) vs. effort? Albert Einstein talked about intrinsic motivation as the enjoyment of seeing and searching. How to stimulate creativity? 3
Definition of creativity Creativity can be defined as the production of novel and useful ideas in anydomain (Stein, 1974; Woodman et al., 1993) Should be recognized in its utility by peers social consensus (Amabile, 1983) From time to time, human beings arrive at ideas that are judged by their fellows to be both novel and valuable (Simon, 1983 PNAS) 4
Closed vs. Open tasks Differ on the presence of constraints Closed task: Choose a combination of words to write a creative story. The words supplied were: house, zero, forgive, curve, relevance, cow, tree, planet, ring, send. Participants were told that they must use these words along with any other combination of words that they wished. Open task: If you had the talent to invent things just by thinking of them, what would you invent and why? 5
Results 7 6,5 6 5,5 5 4,5 4 Tasks Closed Open No incentives Incentives Incentives matter, but only in the closed task! 6
