Funded by: University Fund Limburg (SWOL).
The main goal of our study is to analyze and compare how inequality of outcomes and inequality of opportunities shape innovation through their effects on people's creativity. To this end, we conduct an experimental study in which participants are randomly assigned to one of three treatments, each providing different information about the allocation of bonuses among participants. Our findings highlight the importance of distinguishing between different types of inequality and suggest that inequality of outcomes may impair constrained forms of creativity, whereas inequality of opportunities may have a weaker effect on certain behaviours because it creates greater uncertainty about outcomes. These findings are important because they reveal a potential negative consequence of inequality for innovation (and, potentially, economic growth) by highlighting individuals' psychological responses to unequal environments.
