Modeling prize‐based open design challenges: General framework and FANG‐1 case study

Many organizations are resorting to open prize‐based challenges and competitions to identify the best possible designs for their future products or services. As an example, the Defense Advanced Research Projects Agency (DARPA) hosted an open challenge for designing the drivetrain and mobility subsystem of a Fast Adaptable Next‐Generation Ground Vehicle (FANG‐1) in early 2013. A $1 million prize was awarded to the team with the highest concept score and the design was subsequently physically implemented and tested. The competition was the first attempt by DARPA to utilize crowdsourcing for the design of complex military systems, which is in contrast with contracting directly with a small number of incumbent firms within the defense industry. The competition attracted over 200 participating teams and the winning team was announced in April 2013. In this paper, inspired by the FANG‐1 challenge, a generalizable simulation model for predicting the dynamics of open prize‐based design challenges and competitions is developed using a combination of several modeling methods. The model is then applied to simulate the dynamics of the FANG‐1 challenge ex post facto, including an approximation of the distribution of team scores as well as the interteam motivational interactions. Using the simulation model, various sensitivity analyses were then performed to identify factors that could enhance future design challenges and competitions in terms of resulting innovation and productivity.