Prizes vs Grants
Leonhardt of the NYT considers both in relation to Netflix:
With four and a half years to go in the contest, the Hungarians’ model is already 6.75 percent better than Cinematch. And Netflix hasn’t had to pay for their time. In effect, the company “has recruited a large fraction of the machine learning community for almost no money,” as Mr. Hinton, the Toronto professor, put it.
These are the two essential advantages of prizes. They pay for nothing but performance, and they ensure that anyone with a good idea — not just the usual experts — can take a crack at a tough problem.
…and global warming:
Just look at how both political parties have so far tried to deal with global warming. They have handed out grants and subsidies for various alternative energy sources like ethanol, even though nobody knows what the best sources will ultimately be. A much smarter approach would be to mandate that the economy use less carbon. This would effectively set up a multibillion-dollar prize — in the form of new customers — for whichever companies came up with efficient energy sources.
Robin Hanson (historian of the prize/grant conflict and mentioned in the article) weighs in here.
-Shlok
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