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Field Before After
Trial Status in_development on_going
Abstract This study aims to replicate the key findings of Ederer and Manso (2013), an influential paper applying incentivized laboratory experiments to the study of entrepreneurship and innovation. Using the same experimental design involving a lemonade stand task, we will randomly assign subjects to three incentive conditions: fixed wage, standard pay-for-performance, and an "exploration" contract that tolerates early failure but rewards long-term success. We will test the original hypotheses that subjects under the exploration contract will engage in more exploratory behavior and be more likely to discover the optimal business strategy compared to the other conditions. We will measure exploration through subjects' location choices and variability in product decisions, as well as their final performance. The experiment will be conducted at Shanghai Jiao Tong University Smith Experimental Economics Research Center using the same program and instruction as the original study (with translation). A standard Snowberg/Yariv survey will be conducted. By replicating this study with a new sample, we aim to assess the reliability and generalizability of the original findings on how compensation structures impact innovation. The results will have implications for designing incentive schemes to motivate exploration and innovation in organizational settings. This study aims to replicate the key findings of Ederer and Manso (2013), an influential paper applying incentivized laboratory experiments to the study of entrepreneurship and innovation. Using the same experimental design involving a lemonade stand task, we will randomly assign subjects to three incentive conditions: fixed wage, standard pay-for-performance, and an "exploration" contract that tolerates early failure but rewards long-term success. We will test the original hypotheses that subjects under the exploration contract will engage in more exploratory behavior and be more likely to discover the optimal business strategy compared to the other conditions. We will measure exploration through subjects' location choices and variability in product decisions, as well as their final performance. The experiment will be conducted at Shanghai Jiao Tong University Smith Experimental Economics Research Center using the same program and instruction as the original study (with translation). Additional US sample will be collected at The Cleve E. Willis Experimental Economics Laboratory at UMass Amherst. By replicating this study with a new sample, we aim to assess the reliability and generalizability of the original findings on how compensation structures impact innovation. The results will have implications for designing incentive schemes to motivate exploration and innovation in organizational settings.
Trial End Date March 21, 2025 April 15, 2026
Last Published March 07, 2025 07:50 AM March 23, 2026 03:06 AM
Intervention End Date March 21, 2025 April 15, 2026
Experimental Design (Public) The experiment design will follow exactly at the original study this study tries to replicate, other the instruction language (Chinese instead of English), experimental platform (oTree instead of zTree), and payment (standard hourly payment at Smith Experimental Economics Research Center at Shanghai Jiao Tong University). The experiment design will follow exactly at the original study this study tries to replicate, other the instruction language (Chinese instead of English for the China study; the same for US study), experimental platform (oTree instead of zTree), and payment (standard hourly payment at Smith Experimental Economics Research Center at Shanghai Jiao Tong University).
Planned Number of Clusters at least 379 at least 379 individuals for China study at least 144 individuals for US study
Planned Number of Observations at least 379 at least 379 individuals for China study at least 144 individuals for US study
Sample size (or number of clusters) by treatment arms fixed wage: 51; pay-for-performance: 46; exploration: 47; termination: 71; golden parachute: 78. fixed wage: 51; pay-for-performance: 46; exploration: 47; termination: 71; golden parachute: 78 for China study; fixed wage: 51; pay-for-performance: 46; exploration: 47 for US study.
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Other Primary Investigators

Field Before After
Affiliation ECUST
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Field Before After
Affiliation National University of Singapore
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