Incentives and Creativity in Groups

16 Pages Posted: 4 Sep 2013

See all articles by Joachim Ramm

Joachim Ramm

Ministry of Local Government and Regional Development (Oslo)

Sigve Tjotta

University of Bergen - Department of Economics

Gaute Torsvik

University of Bergen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: August 30, 2013

Abstract

It has been argued that monetary incentives restrain individual creativity and hamper performance in jobs requiring out of the box thinking. This paper reports from an experiment designed to test if the negative incentive effect is present also when individuals work together to solve such problems. We do not find a negative impact of incentives on group performance. As a comparison we ran the same experiment (the Candle Problem) with and without incentives for individuals as well. Incentives did not reduce performance there either. Comparing individuals with groups we find that team-work facilitates creative problems solving. Individuals appear to be more creative when working together than when working alone.

Keywords: incentives, innovation, creativity

JEL Classification: J240, J310, O310, M110

Suggested Citation

Ramm, Joachim and Tjotta, Sigve and Torsvik, Gaute, Incentives and Creativity in Groups (August 30, 2013). CESifo Working Paper Series No. 4374. Available at SSRN: https://ssrn.com/abstract=2319864

Joachim Ramm

Ministry of Local Government and Regional Development (Oslo)

Akersgtata 59
Post box 8112 Dep
Oslo, 0030
Norway

Sigve Tjotta

University of Bergen - Department of Economics ( email )

Fosswinckelsgt. 6
N-5007 Bergen, 5007
Norway

Gaute Torsvik (Contact Author)

University of Bergen - Department of Economics ( email )

Fosswinckelsgt. 6
N-5007 Bergen, 5007
Norway
55589225 (Phone)
55589210 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

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