Incentivizing Mass Creativity:
An Empirical Study of the Online Publishing Market
Guest Speaker: Dr. Xiaolin Li (The London School of Economics and Political Science)
Time/Date: 10 am Tuesday 6th, June 2023
Classroom: Room 2101, Tongji Building A
ABSTRACT:
This paper examines the effects of incentive plans on the quantity and quality of creativeproduction. We study a serial publishing platform which switched from a uniform commissionplan to a quantity-based incentive plan offering higher commission rates if a writer’s production meets higher quantity brackets. Our analysis shows that, for a given book, the chapterspublished in the time periods when writers reached higher brackets of quantity (hence highercommission rates) had higher quality measured by chapter-to-chapter customer retention rates.Such a positive correlation is not significant in books published when the platform offered a uniform commission plan. We theorize that the quantity-based commission plan can enhance thequantity-quality complementarity in a writer’s payoff function. With the enhanced complementarity, the creators who reach a higher bracket of quantity will produce a higher quality under aquantity-based plan than under a uniform commission plan. Further empirical analysis indicatesthat the degree of enhanced complementarity is weaker for the writers who earn commissionsfrom multiple books. Overall, our results underscore the importance of proper incentive designin improving the platform’s performance in managing mass creativity.
Guest Bio
Dr. Xiaolin Li is an Assistant Professor of Marketing in the Department of Management at LSE. She was formerly Assistant Professor of Marketing at Naveen Jindal School of Management, University of Texas at Dallas.
She is interested in empirical quantitative models in marketing, and her current research portfolio is centered on salesforce compensation, B2B marketing, and digital marketing. Methodologically, she strives to bring the most appropriate data collection and analysis techniques to bear on the problem at hand.