Under what conditions would contests for innovation work?

I came across a blog post here where somebody suggests a simplistic idea for accelerating algorithm development for a particular application. I welcome suggestions abd discussions about the conditions under which such algorithm development contests would work. Consider the following questions.

1. Who would fund the prize money, and why would they fund it?
2. Researchers at what level would be motivated towards the contest [at the level of a research lab]?
3. What would be the resources required to implement a contest like this, and what would be the value addition, if any?

E-S theory of gender differences

In my web crawling activities du jour, I came across this on wikipedia.

The empathizing–systemizing (E-S) theory seeks to classify people on the basis of their skills in two factors of empathizing and systemizing. It measures skills using as Empathy Quotient (EQ) and Systemizing Quotient (SQ), and attempts to explain the social and communication symptoms in autism spectrum disorders as deficits and delays in empathy combined with intact or superior systemizing.

This theory seems to explain observations from studies of empathy scores etc., and posits that women are more often E-type, while men are more often S-type. To me, this seems counterintuitive. Intuition tells me that the skills required to empathize, see something from another person's point of view (EQ) are the same as those required to systematize, build a model of something, identify regularities in something (SQ).

[Note that I am not fundamentally opposed to geneder differences in cognition and behavior, I just have a nagging feeling about this theory].

Effective policy making: How to recognize and avoid Martingale-like phenomenon?

I was commenting on Cathy's post on big pharma's evil influence on physicians and the comment grew too long, so I decided to make a post our of this. I think the post was a good example to discuss the role of policy making and its perceived role amongst think tanks on the liberal--conservative spectrum, in general.

I can't access the article, but I don't really agree with Dana et al. (2003) 's recommendations to outrightly ban gifts. More generally, I believe that banning first-order incentives (eg. free dinners) will only sprout second-order incentives (eg. awards of recognition for good medical practice certified by BIGPHARMA, or featuring the physician in a popular article by scratching some journalists' backs) that are 'legal'. The same phenomenon is observable in Madoff-like Ponzi schemes. See a post about the Martingale Crisis (link via Laszlo). In one line, the Martingale hypothesis is: "Suppressing system-circumventions by banning them will lead to further circumvention by more innovative system-circumventions".

So, what is NOT the solution? The solution is not to go on banning every incentive system that crops up. I'll go so far as to say that in my opinion, this is symptomatic of think tanks on the far left and far right, who favor top down solutions from the government rather than bottom up solutions by involving the parties concerened. Rather, it is more effective to recognize that incentives are fundamental to ANY negotiation, be it at the level of policy making among the power-elite, or at home between husband and wife, parent and child. If you need people to get on board with a decision/action/law/yadayada, you need to INCENTIVIZE them, and the most effective solution will be to ask each party what they want. Sadly, this is easier said than done. Of course, the importance of being unbiased cannot be stressed enough.

For a more theoretical analysis of such concepts, we could look to the liberal paradox and arrow's impossibility theorem. I hereby incentivize anyone who is willing to translate these theorems from acadamese to English, by promising a beer-day-out on me.