Inducement Prizes and Innovation

Modeling incentives, R&D activities, and outcomes in innovation inducement prizes

Prizes for Technological Innovation

Science, technology, and innovation are essential to America’s continued economic growth, and can help achieve a wide range of national and global policy objectives. One currently underutilized tool for stimulating technological innovation is inducement prizes, which encourage efforts by contestants to accomplish a particular goal. A related policy instrument is an Advanced Market Commitment, u...

Innovation Inducement Prizes: Connecting Research to Policy

Innovation inducement prizes have been used for centuries. In the U.S., a recent federal policy change—the America COMPETES Reauthorization Act of 2010—clarified and simplified a path by which all federal agencies can offer innovation inducement prizes, thus intensifying interest in how government agencies can most effectively design and apply such prizes. This paper aims to review and synthesi...

Hybrid Innovation in Meiji Japan

Japan’s hybrid system during the Meiji era of technological modernization provides a useful laboratory for examining whether complementary mechanisms to patents induce innovation. Patents were introduced in 1885 and by 1911 1.2 million mostly non-pecuniary prizes were awarded at 8,503 competitions. Prizes increased patent outcomes by 35 percent, a conservative causal estimate based on the timin...

Technology Prizes for Climate Change Mitigation

We analyze whether technology inducement prizes could be a useful complement to standard research grants and contracts in developing climate change mitigation technologies. We find that there are important conceptual advantages to using inducement prizes in certain circumstances. These conceptual inferences are borne out by an examination of the track record of prizes inducing research into pub...