You may have seen in the news that Ashton Kutcher was trying to sign up 1,000,000 Twitter followers and in order to make that goal he offered the 1,000,000th follower a copy of the game Guitar Hero.  This is not a very good mechanism because the optimal strategy it induces is not to sign up (until 999,999 others do, which will not happen because they are also waiting.)  Here is a story about the Kutcher mechanism. (thanks to Joe Spanier and Toomas Hinnosaar for the pointer.)

A better mechanism is the following.  Set a deadline, say midnight.  If at midnight there are fewer than 1,000,000 followers then each of the existing followers wins a prize and the prize that the nth follower wins is decreasing in n. Thus, the 1st follower gets a larger prize than the 2nd which is larger than the 3rd, etc.  On the other hand, if before midnight the number of followers reaches 1,000,000, then give only the 1,000,000th follower a prize.  And it can be a very small prize.

In this mechanism, there is no incentive to wait to sign up and as a result the goal is guaranteed to be reached and the beautiful twist is that the only prize given out is the small prize to the 1,000,00th.

Coincidentally, just last week (before the Kutcher thing) I played this game with my intermediate microeconomics students where my goal was to sign up 150 followers in 2 days.  I offered prizes ranging from $40 for the first follower down to $10 for the 149th follower and $1 to the 150th follower if I made my goal.  If you look at the sidebar to this blog (scroll down on the left) and click through to my twitter page, you can see how I did.