Richard Branson and Al Gore announced today a $25 million prize for the best way to remove significant amounts of carbon dioxide from the atmosphere.
Prizes can draw on dispersed knowledge to produce solutions that were unlikely to have been foreseen in advance. Open source software has a similar advantage – with enough eyes all bugs are shallow.
I think prizes are becoming more common not because people have suddenly learned of their advantages but because the internet has magnified their advantages. A prize today can at low-cost attract and draw from a much larger pool of contestants than in the past. The rise of open source software and the rise of prizes are thus similar responses to the same improvement in communications technology.
Thanks to Lance at A Second Hand Conjecture for the pointer.