Advantages and disadvantages of prizes in a portfolio of financial incentives for space activities

The National Aeronautics and Space Administration (NASA) has proposed to use financial prizes to encourage innovation in space technology. Public debate about the use of prizes questions their effectiveness, the role of government compared with the private sector in administering prizes—for example, the Ansari X-Prize for human suborbital flight was privately funded and administered—and other issues that are likely to influence the success of this approach.