# DARPA Grand Challenge/X-Prize Economic Model
**URL:** https://boards.straightdope.com/t/darpa-grand-challenge-x-prize-economic-model/338663
**Category:** Factual Questions
**Created:** [January 5, 2006, 11:43pm UTC](https://boards.straightdope.com/t/darpa-grand-challenge-x-prize-economic-model/338663 "2006-01-05T23:43:52Z")
**Posts on this page:** 2
**Page:** 1
### Author:  [@Nobody\_Special](https://boards.straightdope.com/u/Nobody_Special)
#### Post date: [January 5, 2006, 11:43pm UTC](https://boards.straightdope.com/t/darpa-grand-challenge-x-prize-economic-model/338663/1 "2006-01-05T23:43:52Z")
Has there been any scholarly analysis of reward-based research incentive programs like the DARPA Grand Challenge or X-Prize that evaluate the economic model of offering a prize for research as opposed to upfront funding. I find it interesting that companies and universities invested far more (individually and collectively) in R&D to win the DARPA and the X-Prize Foundation contests than the value of the prize. I’d google it, but I don’t even know what such an incentive program is called.
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### Author:  [@Shagnasty](https://boards.straightdope.com/u/Shagnasty)
#### Post date: [January 6, 2006, 12:01am UTC](https://boards.straightdope.com/t/darpa-grand-challenge-x-prize-economic-model/338663/2 "2006-01-06T00:01:13Z")
I think the big incentive is that it is a high-profile prize with clearly defined goals. The money is usually nowhere near what it takes to develop the technology to win the prize so economics aren’t usually much of a motive except to offset some of the development cost. Research grants don’t usually induce the same type of competitive environment in the short-term. There can be multiple “winners” in those and partial successes are welcome. That is not true with the all-or-nothing prizes with clear cut criteria for success.