Project
| Year | 2025/26 |
| School / Department / Unit | Economics and Finance |
| Funding Scheme/Source | Research Grants Council - Faculty Development Scheme |
| Project Title | Monetary Incentives and Creativity: An Experimental Investigation |
| Project Team (HSUHK Staff) | Dr LI King-king (PI) |
| Project Period | 2026-01-01 to 2028-12-31 (On-going) |
| Funding Amount | $885,711 |
| Other Collaborating Parties | N/A |
| Abstract | Creativity is an engine for firm's innovation, business strategy, economics development, and for making a better society (Charness and Grieco, 2023; Aghion and Howitt, 2008; Ko and Butler, 2007). Understanding how to foster creativity is an important question not only for academic research but also great social value. Currently, there is limited investigation into this issue, and the evidence is both sparse and mixed. This study experimentally investigates the effect of monetary incentive on creativity using laboratory and field experiment. We experimentally investigate whether there is crowding out effect of monetary payment on creativity. In particular, we compare the creativity of subjects when there is monetary incentive for creativity compared to when there is no monetary incentive. We experimentally compare the performance of payment schemes under different types of creativity task including writing and designing a new product. We conduct field experiment to investigate the effect of different payment schemes. This will be one of the first field experiment on creativity. Our findings will have important policy implications for the business strategies of companies in designing optimal incentive schemes to foster creativity and innovation, which are vital for companies' success in a world where innovation is key to driving business and maintaining competitiveness in the economy. Our findings will also have important implications for education policy in designing optimal ways to nurture students' creativity. For example, designing optimal reward schemes in STEM competitions. |