Incentivizing Mass Creativity: An Empirical Study of the Online Publishing Market

This study examines the effects of incentive plans on the quantity and quality of creative production. We examine a serial publishing platform that switched from a uniform commission (UC) plan to a quantity-based commission (QBC) plan offering a bonus commission rate when writers’ production meets a preset threshold. Our analysis reveals that, for a given book, chapters published in the months when writers reached the preset threshold quantity, and thus earned bonus commission rates, exhibited higher quality, as measured by the chapter-to-chapter customer retention rate. Such a positive correlation was nonsignificant for books published under the UC plan. We interpret that the implementation of a QBC plan enhanced the complementarity between quantity and quality in the writers’ payoff function. Further empirical analysis shows that this effect persisted over time. Moreover, the degree of enhanced complementarity was lower for writers who earned commissions from multiple books. Our key result remains robust when measuring quality by reader comments sentiment. Overall, the findings underscore the critical role of well-designed incentives in enhancing the platform’s effectiveness in managing mass creativity.

This paper was accepted by Raphael Thomadsen, marketing.

Funding: This work was supported by the London School of Economics and Political Science [Internal Research Fund, Department of Management], the Hong Kong University of Science and Technology [Yuk-Shee Chan Professorship Fund], the Rotman School of Management, University of Toronto [China Research Initiative Grant], and McGill University [Desautels Faculty of Management Research Support F]. X. Li thanks LSE Department of Management for internal research fund support. M. Shi thanks HKUST Yuk-Shee Chan Professorship Fund and China Research Initiative Grant by Rotman School of Management, University of Toronto. C. Zhao thanks Desautels Faculty of Management Research Support Fund, McGill University.

Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.01566.