CronoDAS comments on The efficiency of prizes - Less Wrong
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Comments (18)
The (rather flimsy) Harvard Business School paper suggests that prizes are not a very good deal (financially at least) for the solvers; chances-of-winning x prize-money / hours-spent does not look good.
That partially answers my question: in order to be a good (financial) deal for the solvers, prizes generally have to be a lot bigger than they are now.
To took at a totally different area, see the Google Lunar X Prize, from their FAQ:
Obviously, you will gain many benefits (financial and non-financial) beyond the prize if you win, but I think it is safe to say that these prizes by themselves are about inspiring people, not about (direct) financial gain.
Financial gain as a result of prizes often goes to the awarders of the prize - rather than the prize recipients.