Incentives Matter – DARPA Balloon Contest Edition

Did you happen to notice any large red balloons in your area this past weekend? The Defense Advanced Research Projects Agency (DARPA) of the Department of Defense held its Network Challenge on Saturday, a competition that challenged participants to find and submit the locations of ten 8-foot red weather balloons across the continental United States. The prize to the winning participant: $40,000. The purpose of the challenge was to:

to explore how broad-scope problems can be tackled using social networking tools. The Challenge explores basic research issues such as mobilization, collaboration, and trust in diverse social networking constructs and could serve to fuel innovation across a wide spectrum of applications. DARPA plans to meet with teams to review the approaches and strategies used to build networks, collect information, and participate in the Challenge.

Well, you might imagine that incentives were a big part of the winning team’s formula. The MIT Red Balloon Challenge Team offered $2,000 to any individual who sent them a correct location of a balloon. But, to exploit the networks of individuals, they offered additional incentives. If you invited someone to participate in the MIT group and that person found a balloon, you would receive $1,000. If someone invited you (and you invited someone who found the balloon), that person would receive $500 and so on.

How effective was the approach? It took the MIT team less than 9 hours to submit the location of all ten balloons.