To investigate the effect of competitive incentives under peer review, we designed a novel experimental setup called the Art Exhibition Game. We present experimental evidence of how competition introduces both positive and negative effects when creative artifacts are evaluated and selected by peer review. Competition proved to be a double-edged sword: on the one hand, it fosters innovation and product diversity, but on the other hand, it also leads to more unfair reviews and to a lower level of agreement between reviewers. Moreover, an external validation of the quality of peer reviews during the laboratory experiment, based on 23,627 online evaluations on Amazon Mechanical Turk, shows that competition does not significantly increase the level of creativity. Furthermore, the higher rejection rate under competitive conditions does not improve the average quality of published contributions, because more high-quality work is also rejected. Overall, our results could explain why many ground-breaking studies in science end up in lower-tier journals. Differences and similarities between the Art Exhibition Game and scholarly peer review are discussed and the implications for the design of new incentive systems for scientists are explained.peer review | competition | creativity | innovation | fairness C ompetitive incentives are an essential tool to manipulate effort and performance of human groups in many real-life situations (1, 2). Sport tournaments with huge prizes, goal-contingent rewards for employees, and lavish end-of-career bonuses for corporate CEOs are a few examples. However, the literature on incentives and rewards offers mixed evidence of how effective competitive incentives are in improving individual performance (3). In particular, external (monetary) incentives might crowd out intrinsic motivation, which results in no effect, or even a negative effect on individual effort (4-6). Moreover, intrinsic motivation might not only mediate effort, but might actually be necessary to achieve creative performance (7). Similarly, competitive pressure can reduce the performance of professional athletes, causing them to "choke under pressure" (8, 9). Finally, when higher interests are at stake, competition can also directly lead to negative consequences, such as uncooperative behavior and even sabotage (10,11).In this paper, we test the effect of competition in a peer review system. Peer review is a self-regulating system where individuals with similar competence (peers) assess the quality of each other's work. Peer review is widely used by governmental agencies and health care professionals, and it is one of the cornerstones of science. Scholarly peer review is a truly complex system: it involves many actors engaged in multiple roles encompassing various feedback loops (12). Thus far, its inherent complexity and the restricted access to data have made it difficult to investigate peer review. Empirical studies have documented that the review process has low levels of inter-referee agreement (13, 14), lacks reliabilit...