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  • November–December 2018
  • Article
  • Organization Science

Slack Time and Innovation

By: Ajay Agrawal, Christian Catalini, Avi Goldfarb and Hong Luo
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Abstract

Traditional innovation models assume that new ideas are developed up to the point where the benefit of the marginal project is just equal to the cost. Because labor is a key input to innovation when the opportunity cost of time is lower, such as during school breaks or time off from work, we find that such models predict the number of ideas developed will be greater, but the average quality will be lower due to the lower expected value of marginal ideas. However, we posit that slack time such as school breaks may be qualitatively different than work time because contiguous blocks may be particularly beneficial for working on complex projects. We present a model incorporating this idea that predicts that although more ideas will be produced during slack time, they will have higher average complexity and perhaps even higher average value. Using data on 165,410 projects posted on Kickstarter (2009–2015), we report findings consistent with the model's predictions.

Keywords

Crowdfunding; Slack Time; Innovation and Invention; Labor; Projects; Complexity; Value

Citation

Agrawal, Ajay, Christian Catalini, Avi Goldfarb, and Hong Luo. "Slack Time and Innovation." Organization Science 29, no. 6 (November–December 2018): 1056–1073.
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About The Author

Hong Luo

Strategy
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More from the Authors
  • Laboratory Safety and Research Productivity By: Alberto Galasso, Hong Luo and Brooklynn Zhu
  • Infringing Use as a Path to Legal Consumption: Evidence from a Field Experiment By: Hong Luo and Julie Holland Mortimer
  • Managing Medical Device Liability Through Innovation: A Strategic Approach By: Alberto Galasso and Hong Luo
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