Prizes are powerful incentives.
In 1927, Charles Lindbergh flew across the Atlantic to win the $25,00 Orteig prize.
Tartan Racing, a collaboration between students at Carnegie Mellon and General Motors, won a $2 million prize in the 2007 DARPA Grand Challenge, a competition to develop an autonomous ground vehicle for the military.
And, of course, kids since 1912 have been tearing open Cracker Jack boxes to get at the prize inside.
Prizes are fun. The difference between a spelling test and a spelling bee is a prize.
These days, as never before, private companies, foundations and government are turning to prizes as a way to spur technological and environmental innovation. This proliferation of prizes tells us some interesting things about ourselves and about the limits markets, as I’ll argue in a moment.
Best known of the prize-givers is the X Prize Foundation, whose slogan is “revolution through competition.” It’s offering prizes of at least $10 million each for safely landing a robot on the moon (sponsored by Google), for building a super-efficient car (sponsored by Progressive Automotive) and for breakthroughs in genomics. [click to continue…]
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