DARPA simultaneously put ten large red balloons out around the U.S. and challenged teams to identify the locations of all ten for a $40,000 prize. The winning team, based out of MIT, located them all in a matter of hours. They did it with an extremely clever combination of social networking and cash incentives: each person who contributed a correct location got $2,000. The person who invited the balloon-finder got $1,000, the person who invited the inviter got $500, and so on. That built a big enough network of motivated searchers to pull it off, and quickly.
Three things about this struck me. First, it was an ethical pyramid scheme. In a pyramidal scam, the early members wind up getting much more money than the later recruits; in the MIT system, it’s the recruits who actually found the balloons who get the larger rewards. Second, this wasn’t an off-the-shelf (e.g. Facebook group) or wholly ad hoc (e.g. “let’s all just use a wiki and invite folks!”) social network. It was a clever structure that was simple but customized to the challenge at hand. And third, this wasn’t a network of volunteers. They used cash incentives in an explicit, targeted way—and it worked. Lior Strahilevitz +1.