What Motivates Innovative Entrepreneurs? Evidence From a Global Experiment at MIT
Last registered on April 24, 2019

Pre-Trial

Trial Information
General Information
Title
What Motivates Innovative Entrepreneurs? Evidence From a Global Experiment at MIT
RCT ID
AEARCTR-0004125
Initial registration date
April 23, 2019
Last updated
April 24, 2019 9:07 PM EDT
Location(s)
Region
Primary Investigator
Affiliation
Carnegie Mellon University
Other Primary Investigator(s)
PI Affiliation
Columbia GSB
PI Affiliation
Columbia GSB
Additional Trial Information
Status
In development
Start date
2019-04-25
End date
2019-11-25
Secondary IDs
Abstract
Entrepreneurship plays a central role in translating new inventions into useful products and services, and it is often stated that income or wealth is critical in establishing the incentives to create these inventions in the first place. However, despite this strong emphasis of theory on income incentives for entrepreneurship, empirical research has found little evidence of them. Existing studies of comprehensive samples of business owners or self-employed individuals across the United States find that most entrepreneurs do not think they are innovating, do not think they are addressing a new market, have little intention of growth, and are often largely driven by non-pecuniary incentives such as the personal value of ‘being your own boss’. Critics of this lack of evidence often emphasize is that the empirical analysis has focused on the wrong sample. The entrepreneurs of economic theory are ‘innovative (or high-growth) entrepreneurs’, not small businesses and self-employed workers. They represent the small number of innovators bringing new ideas to the market, which are themselves only a small portion of new firms. Since self-employment can occur for many reasons, both positive and negative ones (e.g., lack of other employment options), insights from one group do not necessarily inform the other.

We perform the first causal study on what motivates innovative entrepreneurs. We carry out a series of field experiments which allows us to characterize the role of incentives on the commercialization of technology and the way it shapes the process through which new innovations enter society. We try to assess whether these motivations differ across gender and culture. We take advantage of a unique setting where we can observe innovative entrepreneurs all across the world considering the same task to help their startup: applying to various MIT entrepreneurship challenges.

The first experiment focuses on individuals likely to have interest in the MIT entrepreneurship challenges, this is a larger sample of broad range of entrepreneurship-oriented people. The second focuses on people who have already considered they are a good profile for these competitions by having registered but not yet completed the full application process. Our emails emphasize three different potential incentives that are thought to matter for entrepreneurs: income, social impact, and a control group merely highlighting the MIT brand. In our experiment we randomly send people emails with one of two treatments or the control.
Jointly with the emails we send to the mailing lists, we setup a web page for members of entrepreneurship communities to access on which we also randomize the incentive messages. We then track the behavior of these users on the website.

With these different treatments, we aim to analyze which priming condition engages the individuals more. Engagement will be measured by clicks and time spent. This will allow us a revealed preference way to measure the motivations of these entrepreneurs and why they might engage with these emails. We also aim to analyze these preferences across gender and regions.
External Link(s)
Registration Citation
Citation
Guzman, Jorge , Joohyun Oh and Ananya Sen. 2019. "What Motivates Innovative Entrepreneurs? Evidence From a Global Experiment at MIT." AEA RCT Registry. April 24. https://doi.org/10.1257/rct.4125-2.0.
Former Citation
Guzman, Jorge et al. 2019. "What Motivates Innovative Entrepreneurs? Evidence From a Global Experiment at MIT." AEA RCT Registry. April 24. http://www.socialscienceregistry.org/trials/4125/history/45448.
Sponsors & Partners

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Experimental Details
Interventions
Intervention(s)
The type of entrepreneur the MIT challenge considers is precisely the type of entrepreneurs emphasized in economic theory—individuals with a new idea who are seeking to make it work in a new market. With the support of the Centers, we setup a few experiments that randomly emphasizes different messaging to individuals in the application process. The first experiment focuses on individuals likely to have interest in the MIT entrepreneurship challenge. In particular, we have access to different mailing lists which makes up our sample. We allocate different individuals in the mailing list into three categories: a control group and two treatment groups. This is a larger sample of broad range of entrepreneurship-oriented people. The second focuses on people who have already considered they are a good profile for the MIT challenges by registering for the competitions. Specifically, we take advantage of staggered deadlines where people can start the application by registering by a certain deadline but still have two weeks to complete the application. The existing data shows that only about 30 percent of the registrants finish their applications. This creates an opportunity for a second email to push them to apply, with randomization into one of three groups. Finally, we also partner with a few companies which promote the competition on their own website by embedding a link to the MIT entrepreneurship challenge website. We created this link such that if an individual clicks on it then he/she is randomly assigned to one of the three conditions as he/she lands on the website. We manipulate the content on the website such that it primes one of the three messages: control condition, money incentive or social incentive.

There has been a push to ensure greater participation of female entrepreneurs as well as entrepreneurs from different cultural backgrounds. In addition to looking at the main effects, we also want to see if there is any difference in behavior of entrepreneurs across gender and culture. This will help understand how preferences vary across these extremely important dimensions and how that might translate into eventual entrepreneurial behavior.
Intervention Start Date
2019-04-25
Intervention End Date
2019-10-25
Primary Outcomes
Primary Outcomes (end points)
The main outcomes of interest that we will focus on:
(1) Open rate or clicks on emails
(2) Time spent on website, number of pages visited
(3) Registration or application rates
Primary Outcomes (explanation)
To arrive at a measure of "culture", we will utilize behavioral, cultural, or institutional variation across regions.
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
Our emails emphasize two different potential incentives that are thought to matter for entrepreneurs: income and social impact. In our experiment we randomly send people emails with one of our subject lines as follows.

1. Income Incentive: “Over $1 million in Prize Money! Apply to MIT’s Entrepreneurship Challenge!”
2. Social Impact Incentive: “Create Greater Shared Prosperity! Apply to MIT’s Entrepreneurship Challenge!”
3. Control Condition: "Apply to MIT’s Entrepreneurship Challenge!”

The email body is also amended to prime each of these messages in line with the conditions. We use similar messages when individuals visit the competition's website through the link provided to the partner companies.
Experimental Design Details
Randomization Method
Randomization was done in an office by a computer. Complete randomization was conducted using the "complete_ra" command in the R package "randomizr", with "set.seed" to make the randomization reproducible.

In the case of the website link provided to our partners, the randomization will be done on the fly using a random number generator.
Randomization Unit
The unit of randomization is the individual entrepreneur.
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
30,000 individuals/entrepreneurs
Sample size: planned number of observations
30,000 individuals/entrepreneurs
Sample size (or number of clusters) by treatment arms
10,000 individuals as control, 10,000 in the money treatment and 10,000 in the social incentives treatment.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials

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IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Massachusetts Institute of Technology
IRB Approval Date
2019-04-02
IRB Approval Number
E-1214
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is data collection complete?
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports, Papers & Other Materials
Relevant Paper(s)
REPORTS & OTHER MATERIALS