A lot of organizations in EA are working on prizes right now. I'm skeptical that they will work well without some particular effort - here are my some thoughts on them.
Though looking at the OP cause prioritization prize, Effective Ideas Prize, and the EA Criticism Prize, it seems like a lot of prizes are actually going pretty well so far.
(This is an experiment where ordinarily I would've spent time to make this a longer post, but after a few months I'm clearly not going to make time for this so instead I'm just going to post the outline to my post without working hard to turn it into a proper post. Let me know what you think about this format and I may do it more. Further note that this a personal post written on my own and not as a result of my role at Rethink Priorities.)
Why prizes are good
- It’s easier to evaluate retrospectively than prospectively - you only have to pay for the things you like (or at least whatever you like most).
- It lets people audition for a role, potentially letting talent shine that wouldn't otherwise get recognized ex ante.
- They raise the salience of a particular need of grantmaker(s).
- They're helpful for providing explicit encouragement to get people to do things they probably would've been happy to do anyway.
- They provide credentials people can use in the future (e.g., "I was winner of {PRIZE}" goes on the resume).
Ways prizes fail
- Prizes are often not large enough to produce sufficient expected value
- Even if the expected value is good, people are not (an should not be) risk neutral with regard to personal finances
- Even if the expected value is good, people frequently do not have the startup capital to float to get the prize
- There are illusions of transparency where prize makers think they have clearly articulated what they want but they don’t, which leads to a lot of wasted time and disappointment
- There is counterparty risk where someone taking on the personal risk of doing the prize may do well but then not be evaluated the way they expect
Ideas on how to make prizes better
- Explicitly attempt to calculate expected value for participants and then offer a large enough prize
- Be open to increasing the prize amount
- In addition to the prize, offer to evaluate people/teams prospectively as best you can and give them start up capital to attempt the prize
- Have smaller milestones that result in prizes to ensure people are on the same page and to reduce risk (the OP cause prioritization prize is great at this with honorable mentions)
- Offer lots of smaller prizes to honorable mentions/attempts to smooth out risk
- Invest a lot of time upfront to internally understand and externally communicate what you want and how you will judge things
Another downside is that it eats up quite a lot of time. E.g. if we take the Cause Exploration Prize and assume:
then we get ~2 FTE years spent (90% CI 1.2-3.6 years). That's quite a lot of labour spent by engaged and talented EAs (and ppl adjacent to EA)!
(Caveats: Those assumptions are only off-the-cuff guesses. It's not clear to me what the counterfactual is, but presumably some of these hours wouldn't have been spent doing productive-for-EA work. Also, I'm not sure whether, had you hired a person to think of new cause areas for 2 years, they would've done as well, and at any rate it would've taken them 2 years!)
Edit: To be clear, I'm not saying the Prize isn't worth it. I just wanted to point out a cost that may to some degree be hidden when the org that runs a contest isn't the one doing most of the labour.
It's a 2 year full time equivalent, but I think in these cases you get most of the value from it being done by so many different people rather than one person over two years. This gives you not only the advantage of parallelization, but also that of having a diversity of perspectives, which is good for being more thorough in digging into different causes.
Secondly, I don't know how many people actually get a prize, but I think tons of these potential cause area writeups will be valuable in the future as the movement grows, regardless of whether OpenPhil decides to use them at this moment.