Competition, Contracts, and Creativity: Evidence from Novel Writing in a Platform Market
A large amount of creative activities nowadays have moved online. Because of low barriers to entry, creative workers often compete fiercely. Whether and how competition propels creative effort is an important question for understanding the development and regulation in the creative industries. In th...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
The University of Pennsylvania
2023
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| Subjects: | |
| Online Access: | https://dlic.huc.edu.vn/handle/HUC/5561 |
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Add Tag | Summary: | A large amount of creative activities nowadays have moved online. Because of low barriers to entry, creative workers often compete fiercely. Whether and how competition propels creative effort is an important question for understanding the development and regulation in the creative industries. In this paper, we study the effects of competition on worker effort and creative outcomes on a Chinese online novel-writing platform. Authors produce and sell their works chapter-by-chapter under a revenue-sharing or pay-by-the-word contract with the platform. Exploiting an anti-pornography regulation that induced a massive entry of romance novels but not others, we find that intensified competition on average led authors to produce content faster while the effect on book novelty was weak. However, revenue-sharing books responded substantially more than pay-by-the-word books, particularly regarding novelty. Finally, the platform increased promotion of contracted books, and this increase disproportionately favored pay-by-the-word books. As a result, these books achieved better market performance than revenue-sharing books. These findings show that market competition spurs creative production when individuals are rewarded under performance-based incentive structures, but the involvement of a powerful gatekeeper in commercializing creative work may distort the relationship between producers’ efforts and market performance. |
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How to write a novel