Experimental evidence on the effects of innovation contests

Julia Brueggemann and Lukas Meub

No 251, University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics

Abstract: Economic research on innovation has long discussed which policy instruments best foster innovativeness in individuals and organizations. One of the instruments easily accessible to policy-makers is innovation contests; however, there is ambiguous empirical evidence concerning how such contests should be designed. Our experimental study provides evidence by analyzing the effects of two different innovation contests on subjects´ innovativeness: a prize for the aggregate innovativeness and a prize for the best innovation. We implement a creative real effort task simulating a sequential innovation process, whereby subjects determine royalty fees for their created products, which also serve as a measure of cooperation. We find that both contest conditions reduce the willingness to cooperate between subjects compared to a benchmark condition without an innovation contest. However, the total innovation activity is not influenced by introducing innovation contest schemes. From a policy perspective, the implementation of state-subsidized innovation contests in addition to the existing intellectual property rights system should be questioned.

Keywords: innovation prizes; competition; laboratory experiment; real effort task; creativity; innovation policy (search for similar items in EconPapers)
JEL-codes: C91 D89 O31 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-cbe, nep-cse, nep-exp and nep-ino
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:251

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