Here is an interesting article that i found of Clusterstock that talks about how a team from MIT was able to win a competition by sharing their profits. Interesting Read and Economics lesson!
There’s nothing wrong with hoping for charity and good-intentions from people, but in the end profit incentives provide the most effective way to motivate large numbers of people to join together and solve problems.
A team from the Massachusetts Institute of Technology (MIT) just made this very clear when presented by an internet contest from the U.S. Department of Defense:
The Guardian: The Darpa Network Challenge, which took place on Saturday, offered a cash prize for the first group to successfully locate 10 large red weather balloons hidden at a string of secret locations across the US.
Competitors were asked to use the internet and social networking sites to discover the whereabouts of the balloons, in what Darpa – the Pentagon’s Defense Advanced Research Projects Agency – said was an experiment to discover how the internet could help with rapid problem solving.
The MIT team completed what was supposed to be a nine-hour challenge in just nine-hours. How? They paid out a portion of their prize money to whomever could help them.
The winning team has not explained precisely how they came to discover the location of all 10 balloons, but the process detailed on the team website explains that they created a viral campaign to encourage people to put forward information they gleaned about the locations.
The team offered the first person to spot a balloon a $2,000 share of the prize money, but smaller awards would also be given to those who referred that player to MIT’s website – a scheme of incentives aimed at getting people to urge their friends to take part.
Here’s a sense for how they set up the incentive structure:
MIT Red Balloon: Have all your friends sign up using your personalized invitation. If anyone you invite, or anyone they invite, or anyone they invite (…and so on) win money, then so will you!
We’re giving $2000 per balloon to the first person to send us the correct coordinates, but that’s not all — we’re also giving $1000 to the person who invited them. Then we’re giving $500 whoever invited the inviter, and $250 to whoever invited them, and so on..
Checking out the team’s website here.
- Dealing With Short-Term Underperformance is Tough. Reflecting on Nikko Shenton Global Opportunities Merger. - March 3, 2024
- Singapore Savings Bonds SSB April 2024 Yield Climbs to 3.04% (SBAPR24 GX24040Z) - March 1, 2024
- How to Select a Smartphone with A Decently Long Battery Life (That is not an Apple or Samsung Flagship Phone). - February 28, 2024