Can You Buy Creativity in the Gig Economy?

In China, e-publishing platforms have become a multibillion-dollar industry, attracting more than 1 million authors and over 300 million readers. Authors tend to produce commercially popular fare, such as romance novels, mysteries, crime fiction, and books about science fiction and martial arts.

Some novelists are paid a fixed price, similar to the way that Charles Dickens was paid for each installment of The Pickwick Papers in the 1800s. With this model, authors receive the same payment for their books regardless of how popular the books may become.

The researchers discovered that as competition intensified, authors who were paid a fixed price for their work did not appear to change their productivity, whereas those authors who received a cut not only produced more but were more likely to write creatively than those paid a fixed amount.

However, because a fixed-price arrangement favours the publishing platform, the site tended to promote those books more aggressively, and in turn, flat-fee books received more views.

The most important implication of the research may be for the powerful platforms that act as gatekeepers to the creative content we consume: Without an incentive structure allowing content providers to reap the rewards for their efforts, workers may have low incentives to boost the quantity or novelty of what they create.

And if the platforms choose to maximize their own profits by opting for a fixed-price reward system, cutting workers out, they could end up stifling creativity.