Maybe, but the makers need higher stakes. A study by Feng Zhu of 10,000 novels on the Chinese e-book market shows how linking salary and performance can lead to new insights.
Writers may lament the uncertainty of the digital age as many turn to online marketplaces to distribute their works without promises of fame or fortune. However, according to a study of China’s e-book market, authors tend to work harder and become more creative when they’re guaranteed a cut of their own book sales.
According to a study by Harvard Business School professor Feng Zhu, new regulations have rocked China’s e-book scene, intensifying competition and spurring authors to do more work. Book deals that give authors a share of the revenue, rather than just paying them a flat rate for production, also motivate them to produce more interesting content.
The results could prompt publishers to consider changing their remuneration structures to reward authors for originality. Beyond assignment, the study highlights effective ways to link pay to performance to encourage workers to be creative.
“It turns out that these freelancers are, on average, sensitive to competition,” said Zhu, co-author of the upcoming article Competition, Contracts, and Creativity: Evidence from Novel Writing on the Platform Marketplace in Management Science journal with Yanhui Wu from the University of Hong Kong. “That’s good because we want people to develop a more competitive mindset and produce better and more creative content.”
The critical compensation structure
Zhu and Wu tracked the popularity of e-fiction based on reader clicks and purchases, and measured an author’s productivity based on the frequency with which an author updates a set of books per month. Creativity is measured by tracking nearly a million reader reviews, in part using machine learning, and by searching for keywords such as “original”, “creative”, “surprisingly intelligent”, “creative” and “surprise”.
The researchers found that when competition increases sharply, authors who receive a fixed price for their work are unlikely to change their productivity, while authors who receive the discount not only produce more but are also more likely to write creatively , earn more than those who receive a fixed salary.
“This indicates that most of the positive gains from the competition came from the authors under the revenue sharing agreement. If we’re using revenue-sharing contracts in the gig economy, we shouldn’t worry about a lack of creativity,” he zhu said. And we shouldn’t worry about contract workers quitting due to increased competition.
However, since the fixed price agreement favors the publishing platform, the website tends to promote these books more aggressively and in return the fixed price books get more visits. The message, Zhu says, is simple: “Contractual agreements are changing the incentives for both freelancers and platforms, and platform advertising can play an important role in commercial success.
Tips for Creative Keepers
Perhaps the most important conclusion of the research concerns the powerful platforms that act as gatekeepers to the creative content we use: without mechanisms to encourage content providers to reap the rewards of their efforts, workers may have weak incentives to scale up or down Novelty its content.
And if platforms choose to maximize their profits by opting for a fixed-price compensation system that cuts workforces, they could end up stifling creativity. Zhu said the idea can also be applied to contexts outside of creative production.
For his follow-up research, Zhu said he wanted to test how freelancers choose between contracts.
“It will be interesting to see how they gain experience as casual workers and how that experience affects the type of contract they choose,” he said.
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