That partially answers my question: in order to be a good (financial) deal for the solvers, prizes generally have to be a lot bigger than they are now.
How much will teams spend to win the Google Lunar X PRIZE?
Three centuries of history have shown that teams competing to win incentive prizes often spend more than the prize value itself. Teams in competitions such as the Orteig Prize, the Ansari X PRIZE, and the DARPA Grand Challenges have spent as much as 5 times the prize purse value to fund their entries; and expenditures of 2.5 times the prize purse value by individual teams are relatively common.
We expect that teams pursuing the Google Lunar X PRIZE will follow these historical trends. A broad range of team expenditures—from as low as $15 million to as high as $100 million—are expected. Past prizes have shown the best funded teams do not necessarily win the prize, however. We look forward to learning from our teams as they pioneer new methods to raise money and to trim costs for a lunar mission.
Obviously, you will gain many benefits (financial and non-financial) beyond the prize if you win, but I think it is safe to say that these prizes by themselves are about inspiring people, not about (direct) financial gain.
That partially answers my question: in order to be a good (financial) deal for the solvers, prizes generally have to be a lot bigger than they are now.
To took at a totally different area, see the Google Lunar X Prize, from their FAQ:
Obviously, you will gain many benefits (financial and non-financial) beyond the prize if you win, but I think it is safe to say that these prizes by themselves are about inspiring people, not about (direct) financial gain.
Financial gain as a result of prizes often goes to the awarders of the prize—rather than the prize recipients.