Jesse—there’s actually some economic theory about prizes, that argues that they are singularly effective in developing new technology. If you’re interested in the topic generally, one place to read about it is at www.marginalrevolution.com. This economics blog is run by a couple of professors who teach at George Mason University. Their personal leanings are towards the libertarian, but then, so are those of most economists. And their blog is moderately even-handed and (importantly for me, since I’m no economist) accessible—usually written in easy-to-understand English.

Whether the amount of money offered in this case is enough, is a separate question. Most people seem to be agreeing with you that it is not.

And speaking of prizes, I’m still waiting to hear from you about my $20 for sorting out the Dowd column.

At least here in Canada, seasons 1 and 2 of Family Guy are sold together.

”-there’s actually some economic theory about prizes, that argues that they are singularly effective in developing new technology.

I’d buy that. As long as the prize was sufficiently rare.
Cure stomach cancer for a Parker Lewis Can’t Lose lunchbox?? Count me in!

Jesse—there’s actually some economic theory about prizes, that argues that they are singularly effective in developing new technology.

Yeah!  Just like the X Prize and the whole private reusable spaceship thing! 

Look!  There goes SpaceShip 1 now!

Oh, wait.  That’s the News 5 helicopter.

My bad.

Anyways, I am SO glad McCain wants to go the prize route, instead of doing some sloppy, wasteful crap like the Manhattan Project. You can always count on ‘ol 894 of 899 to be on top of things like this!

Prizes are an excellent way to spur technology development - a prize was one of the major motivating factors behind the development of the Marine Chronometer, which finally solved the problem of determining longitude.  Prior to direct funding of research by government prizes were one of the major ways technology development was promoted.

A prize not only offers reward, it also promotes a particular problem to the forefront of people’s attention, so you get lots of minds working on it and lots of people willing to fund it.  The end result is that a well chosen prize can induce investors to spend many times the amount of the prize purse.  The total amount of money spent on the X Prize was in the neighborhood of $50 million in order to win a $10 million prize.  That was a privately funded prize, but the principle still holds when the government puts up the money.

The big problem with McCain’s prize suggestion is that it doesn’t apply the prize method very well.  There are already hundreds of millions of dollars being spent on battery development, and plenty of investment money available for anyone with a sound idea.  A prize would do very little to advance progress.  I happen to know about the amount of cash available in this area since the company I work for is seeking investment money and we are tapping the same pool of investors.  For a prize to really shake the money tree it has to be in an area where there isn’t already a boatload of cash looking for a promising idea.

$300 Mil is both too much and too little. Way too much to pay for something that could fulfill the criteria and still be a bust, and way too little to get an actual vehicle into serious mass production.

Maybe if Cindy McCain would bankroll it instead of the government.

My favorite prize story: US chemistry professor wins $1 million engineering prize (2007 Grainger Challenge Prize for Sustainability, administered by the National Academy of Engineering) for developing a simple and inexpensive means of filtering arsenic from well water and preventing serious health problems in hundreds of thousands of people in Bangladesh (his native country) and elsewhere.
http://www.washingtonpost.com/wp-dyn/content/article/2007/02/01/AR2007020101874.html

But that says nothing about how a prize would work in this context. Togolosh’s insider info is certainly dispiriting in that regard.

Prior to direct funding of research by government prizes were one of the major ways technology development was promoted.

Yes, but now direct funding of research by the government exists.  How much further could $300 million go as research funding, especially since the corporate capital structure already exists that will earn exponentially more money for anyone who could achieve the task at hand without major support from existing research institutions.

Opoponax - direct funding has its place, especially in basic research, but it also has limitations.  There is a lot of overhead inherent in government funded research due to the need to make sure that not only is the money being spent as intended but it’s also documented as having been spent as intended, not to mention things like the need for a formal peer review process.  Privately funded R&D;can be much more fast and loose because there is only one (or at most a few) person who has money on the line, as opposed to 300 million people.  There are additional constraints on direct R&D;funding due to pork barrel issues - I know of a number of promising projects that were shot down because they didn’t put money into the right congressional districts, and a whole host of other ones (such as the entirety of NASA) that are crippled by the need to spread money over large numbers of congressional districts, imposing a heavy burden of communications overhead on even the simplest of tasks.

I’ve done R&D;at a University, a privately funded company, and a company working under government contract.  By far the best bang for the research buck was at the privately funded company - overhead was minimal, both the financial burden and the much more harmful “attention tax” that comes with constantly having to shift focus from productive work to filling out the correct forms for even the simplest items.  It’s really hard to accurately communicate how much of an effect minor hassles can have on research - they create a friction that slows down everything, breaking up the vital flow of creative energy and diverting it into fruitless channels.

I think government should fund basic research and applied R&D;because much of that work simply won’t get done otherwise, not to mention the knock-on positive effects from having students pass through research labs.  But - direct funding should not be the sole means of supporting R&D;because it inevitably requires picking winners and losers among technologies rather than simply prioritizing results.  Prizes that reward specific results avoid the whole question of which technological horse to back and focus energy directly on the problem.  Prizes also leverage private funding, so the total amount of R&D;money spent may be several times more than the value of the prize itself.

A balanced Federal R&D;portfolio ought to have 10-20% invested in prizes IMO - it’s just too useful a mechanism to ignore.  Unfortunately McCain’s suggestion is stupid in the details for reasons I mentioned above.

We could do a combo deal—Manhattan Project for sustainable energy source and the guy in th lab who makes the breakthrough gets the family Guy DVDs. Everybody wins!

McCain’s idea would have been hot-sh*t, five years ago.  The Republicans raise the issue now in a desperate attempt to gain some traction against Obama. If you follow the news, you’ll realize that the big car companies have finally gotten it!  Now that their SUV’s are dying on the sales lot - suddenly, they’re on the team!  Go Green!  GM, and the rest, don’t need the government’s $300 million as incentive to develop better batteries - they see the light. 

This is just another way for McCain to sound ‘with it”, all the while rewarding his big-business pals for what they were doing anyway.