Idea Generation and the Role of Feedback: Evidence from Field Experiments with Innovation Tournaments

Abstract

In many innovation settings, ideas are generated over time and managers face a decision about if and how to provide in‐process feedback to the idea generators about the quality of submissions. In this article, we use design contests allowing repeated entry to examine the effect of in‐process feedback on idea generation. We report on a set of field experiments using two online contest websites to compare the performance of three different feedback treatments— no feedback, random feedback, and directed feedback (i.e., in‐process feedback highly correlated with the final quality rating of the entry). We posted six logo design contests for consumer products and accepted submissions for 1 week. We provided daily feedback during the contest period using one of the three treatments. We then used a panel of target consumers to rate the quality of each idea. We find that directed feedback is associated positively with agent participation. For outcome, while directed feedback benefits the average quality of entries submitted, we don't find that relationship for the best entries—indeed, no feedback or random feedback may produce better top‐end entry quality. We also find that, under directed feedback, the variance in quality declines as the contest progresses.