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Paying For Legitimacy? The Signalling Effect Of Monetary Rewards In Innovation Contests

Author

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  • CHRISTOPH IHL

    (Hamburg University of Technology (TUHH), TUHH Institute of Entrepreneurship, Am Irrgarten 3-9, 21073 Hamburg, Germany)

  • ALEXANDER VOSSEN

    (University of Siegen, Entrepreneurship in Context, Kohlbettstr. 15, 57072 Siegen, Germany)

Abstract

Monetary rewards have become widely used to compensate user engagement in innovation contests. Building on literature on social judgement of organisations, we provide evidence on another important effect of monetary rewards in innovation contests, namely a signalling effect that may either enhance or lower a contest host’s legitimacy and subsequently users’ willingness to participate in the contest. Along three studies, we show that the signalling effect is especially beneficial for the innovation contest purposes that are incongruent with the host’s organisational stereotype, i.e., in cases where she lacks specific organisational traits that constitute users’ perception of organisational legitimacy. Offering a higher monetary reward in such a scenario allows hosts to overcome a lack of legitimacy and consequently foster user participation.

Suggested Citation

  • Christoph Ihl & Alexander Vossen, 2021. "Paying For Legitimacy? The Signalling Effect Of Monetary Rewards In Innovation Contests," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 25(04), pages 1-29, May.
    • Handle: RePEc:wsi:ijimxx:v:25:y:2021:i:04:n:s1363919621500444
    DOI: 10.1142/S1363919621500444
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    Cited by:

    1. Patel, Chirag & Ahmad Husairi, Mariyani & Haon, Christophe & Oberoi, Poonam, 2023. "Monetary rewards and self-selection in design crowdsourcing contests: Managing participation, contribution appropriateness, and winning trade-offs," Technological Forecasting and Social Change, Elsevier, vol. 191(C).

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