The Defense Department just sponsored a contest in which they randomly placed 10 large red balloons across the United States and challenged teams to find them all. The one who found all 10 first would get $40,000.
The National Department of Supervisory Agencies for Universal Surveys for Many Different Types of Objects took on the challenge from its massive Washington DC headquarters. It dispatched instructions by secure mail pouch Circular #10-A643 to its 135 regional offices, notifying them to add large red balloons to the Watch List in their multiyear project for surveying the entire United States for Many Different Types of Objects. When last we heard, the regional offices were contacting Washington headquarters for clarification as to what diameter balloon should be considered “large.”
The winning team, at the MIT Media Lab, found all 10 balloons in 8 hours and 56 minutes. They used decentralized search through the Internet, spreading the message through web sites and social networks that there would be cash rewards to any chain of people that resulted in a balloon find. In the end, they drew on the efforts of 4,665 people.
As Dr. Riley Crane, the leader of the MIT group, explained:
If you heard about our Web site and went to sign up directly, and you found a balloon, you would get $2,000…. If instead you signed up and then you told your friends, and one of your friends found a balloon, that person would still get $2,000 because they found the balloon. And you, because you signed someone up who found the balloon, would also be rewarded with $1,000…
Wow, the Defense Department has just simulated an entrepreneurial economy! Entrepreneurs search for things that will pay off, or search for other people who will find things that pay off.
Searchers also work in aid, finding techniques or projects that work where you least expect to find them. That’s how aid found microcredit, conditional cash transfers, mobile banking, water purification tablets, nutritional supplements, oral rehydration therapy, and on and on.
The first and only time I met Bill Gates, he complained about my book “what is all this nebulous crap about searchers?” The funny thing about very successful Entrepreneurs is that not even they realize that they are part of a decentralized search network. They think it was all their brilliance – the equivalent of the 10 — out of the 4,665 –who actually spotted the balloons thinking “we are so brilliant at balloon finding.”
Hat tip to the great searcher Michael Clemens, for drawing our attention to the story.
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“That’s how aid found microcredit, conditional cash transfers, mobile banking, water purification tablets, nutritional supplements, oral rehydration therapy, and on and on.”
Oral rehydration therapy, as discussed before, was discovered as the result of a multi-year, multi-million pound research effort largely funded by USAID. Putting that down to ‘Searching’ and ignoring the very important element of ‘Planning’ involved is just perpetuating a misleading and ideologically motivated dichotomy.
I saw the red balloon guy on Colbert, and I was fascinated by the idea that it wasn’t better tech that found the balloon, just better structured incentives.
Interesting view, and interesting tactic of recursive incentives employed by MIT to win the competition.
I see MIT placed a value of $4,000 to each balloon, with every person involved in the chain of finding the balloon winning some of the fee.
I wonder how many of these chains were distorted? I.e. someone found a balloon but passed on the info to a friend so rather than claim a total of $2,000, they collectively claimed $3,000 … until as the chain expands the people involved collect the total $4,000.
With whatever was not claimed by a chain out of the value of a balloon of $4,000 going to charity, it would perhaps throw up an interesting query for how self-interested (or collectively self-interested if that is possible!) searchers are.
Any thoughts?
Very nice illustration Bill. Happens every day in the real world. But when a Younus Ahmed or a Desoto is discovered, he is soon flooded with donor funds, reports, evaluations and invitations. I wonder how much of the original purpose of the entrepreneurship remains intact.
It is hard to be a searcher in an overbearing donor world.
Absolutely, it is all about the incentives!
Look at the Basel Committee which is the masters voice on bank regulations, they told banks “if you do business with triple a rated companies then you almost need no capital at all (1.6 percent) … and look how many AAAs they found… even among the worst mortgages ever awarded to the subprime sector.
In this case the Department of Defense seems to have gotten the incentives about right, with the ten balloons found in eight hours and 56 minutes. Had it been the Basel Committee the market would have found about 99 in 17 minutes.
By the way I hope the Department of Defense made sure they got the right balloons before paying out the prize… I mean even if it was a team at the MIT you cannot be too careful these days.
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This post was mentioned on Twitter by timkastelle: Interesting take on the DARPA red balloon challenge from @bill_easterly comparing it to aid efforts http://bit.ly/79FBmf...
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