IS THERE SUCH a thing as a best book? Do literary prizes really mean anything? And how much publicity should be associated with them? Are prizes given fairly and do they do anyone any good? Such are the kinds of questions which crop up regularly in the literary world.

Prizes clearly help sales, although often, by the time a book has won something, it has disappeared from the stores. Yet prizes do bring name recognition to authors, at least for a while; and, most important, they remind the public that books exist.

The practical and emotional benefits of prizes are probably greatest for first novelists. "Without notice of some kind I might have drifted on to another avocation," said Marilynne Robinson who won three prizes and three nominations for her first novel, Housekeeping, including the P.E.N.-Hemingway award for the best first work of fiction and a nomination for the Pulitzer. "Writing is always difficult, and it distorts one's life, with its requirements of solitude and its tendency to trouble one's emotional waters."

Robb Forman Dew, who won an American Book Award last year for Dale Loves Sophie to Death,, said her prize gave her another kind of courage.

"The book I'm writing now is about a much darker side of domestic life than Dale Loves Sophie," she said. "If I hadn't won that award I don't think I would have tackled a subject this ambitious."

Of course, there are risks to early acclaim. There's fear on the author's part that he or she won't be able to live up to expectations, pressure to keep on pleasing the crowd and the danger that acclaim will persuade a young writer that he has already perfected his craft. Prizes also seem to make critics more prickly.

"If a number of prizes are emblazoned on a book jacket," said John Updike, "I know that, as a critic, my back is slightly up. I may be tougher with the book than I would be ordinarily. I think, for instance, that Saul Bellow's The Dean's December was given rougher treatment than perhaps it should have because he presumed to win the Nobel Prize, which annoyed a lot of people. It didn't annoy me, but a prize like that certainly doesn't help in establishing the innocent rapport between a reader and a book that should exist."

In spite of these drawbacks, prizes given to new or previously unrecognized writers are on the whole beneficial. Whether they mean much otherwise is problematic. Updike has his doubts about them, even though he has won many prizes himself, including the National Book Critics Circle Award and the Pulitzer Prize in 1982, for Rabbit Is Rich.

"For every writer you encourage with a prize, you discourage the 10 or 20 or 1,000 who didn't get it," he said. "And although it's true I've won a number, I was much more aware of the many years when I didn't win a prize. And there's been a kind of multiplication of prizes lately that, in a way, trivializes all of them.

"Also, I felt that several extra-literary things helped Rabbit Is Rich. It was kind of large--it was 400 pages, whereas my books generally run about 300 or less--and I was kind of due in a strange way. I've been pulling the cart for 25 years now and probably that didn't hurt. That doesn't mean I wasn't tickled pink to get the awards. In a way, having won the Pulitzer is kind of a weight off your mind; you can put that behind you and you are forever after a Pulitzer Prize-winning author and somehow that counts a little. But the things that have mattered most to me in my literary career have been acceptance from editors."

"I find the whole thing very mysterious," said Alice Walker, who won both the Pulitzer and the American Book Award this year for The Color Purple. "I mean, who are these people on the Pulitzer Board? What are their standards and why are they doing this? If the Pulitzer was given by the ladies in my mother's church, who have high standards and a strict moral sense and, besides, who know me, I'd know what it means." Nevertheless, she added, the prizes have helped keep her book on the best seller list, and have also pleased her readers. "I got hundreds of letters from people who've been reading me for years congratulating me. Some even said, 'I feel we've won them together'--a sort of people's Pulitzer."

"There's a lot of favoritism in prize-giving," said William Styron, who won the Pulitzer in 1968 for The Confessions of Nat Turner. "A lot of books that deserve awards never get them. I have a very limited regard for awards generally, except for the ones that are given to writers who have yet to achieve recognition. When I won the Pulitzer, I realized, going down the list of winners, that there weren't a great number of them I felt terribly proud to be with. I don't think that the Pulitzer Prize in fiction has kept extremely high standards. I could say that for the Nobel Prize too. There are too many worthy writers who have missed the prize to make it a really meaningful thing."

Styron has a point. Yeats, Faulkner, T.S. Eliot, Hemingway and Camus may have won the Nobel, but Tolstoy, Chekhov, Twain and Proust--all eligible--did not. Indeed, who wins prizes and why is one of the main controversies in literary circles. The methods of judging vary widely and none of them earns everyone's approval. Updike, for instance, says he thinks that the expansion of the National Book Award panel of judges from three to five helped kill off the award.

"Three people can generally, rather quickly I think, arrive at a conclusion," he said. "At five or more you begin to get big enough to break into cliques and you get politicking, so that often a book that's everybody's second choice wins instead of a real first choice. The more judges, the more apt you are to get a kind of mediocre book instead of one with lasting merit."

"I've seen cases of judging where one person likes Book A best, another likes Book B, so everybody compromises and chooses Book C," said Hortense Calisher, who has been a member of the American Academy and Institute of Arts and Letters for many years but has avoided judging prizes whenever possible. "One case I remember like that was when Walker Percy won the 1962 National Book Award for The Moviegoer. Vladimir Nabokov was up for it that year for Pale Fire and so was Isaac Bashevis Singer with The Slave. Percy won because A.J. Liebling was mad about his book and Liebling's wife was on the panel."

The P.E.N.-Faulkner and the P.E.N.-Hemingway awards are the only ones that still use three judges. The National Book Critics Circle Award is judged by its 24- member board of directors, the Pulitzer by its 18 board members and The American Book Awards by 11. Most of the 18 awards for literature granted by the American Acadamy and Institute of Arts and Letters (known as the Acadamy-Institute) are judged by a seven-member panel. These numbers do indeed beg Updike's question--can a book that pleases such a large number of different tastes be anything but middling?

The American Book Awards have tried to avoid the politicking problem by keeping their judges unknown to each other until after the contest. The other award panels all hold discussions before choosing a winner, but the American Book Award judges vote separately, send their choices to Touche Ross, a prominent New York accounting firm and wait for the firm to calculate the winner. This may avoid squabbling among the judges, but it still doesn't guarantee that most people's number-one choice will win.

"On the face of it, choosing a best book at all is absurd," said Kurt Vonnegut Jr., who has often served as a judge for the Academy-Institute. "It's not like judging an ice-skating competition. There is no best book, no best author. So judging necessarily becomes a personal, 'Who would be most helped by this? Who would get off the most on this prize?' The idea is to help the author and society too. Perhaps you can jazz up an author, and society would be enriched by another book."

When money, especially large sums of it, is offered along with the prize, Vonnegut's question of who would be most helped by a prize is extremely important. Some of the Academy-Institute awards offer generous amounts --the new Mildred and Harold Strauss Livings Award, won by Cynthia Ozick and Raymond Carver last January, for instance, will bring them $35,000 a year each, tax free, for a minimum of five years. The MacArthur Prize, otherwise known as the "genius awards" also offers vast sums, although not for literature alone; in January John Sayles won a MacArthur that will give him $30,000 a year in monthly checks for the next five years, and William Kennedy is to receive $264,000 over five years from the same prize. Most of the awards, however, offer nothing, like the National Book Critics Circle Award, or mere pin money. The Pulitzer and The American Book Award are each $1,000, the P.E.N.-Faulkner Award is $5,000 and the P.E.N.-Hemingway Award has gone up this year from $6,000 to $7,500. For many writers, especially poor ones, a grant can be more useful than a prize.

"The MacArthur has absolutely liberated me from working for the next five years," Kennedy said. "It's also gotten my name more widely known in academic circles. I was suddenly asked by four universities to come and work. Up until this it was a long hard haul. For about 20 years I worked part time and lived comfortably but deeply in debt."

Unfortunately, both grants and prizes usually go to writers who have already been through their hardest times. "When I got the MacArthur Prize I didn't need money so much anymore as time," Mr. Sayles said. "Prizes are rarely based on need."

Another side to prize-giving is the publicity. Most literary awards are quiet affairs, but the Nobel and The American Book Awards are notable exceptions. When Singer won the Nobel Prize in 1977, he was so swamped by reporters that he had to hide in a hotel suite across from his apartment for over a week. Some writers deal with publicity by moving, changing phone numbers constantly or, like Saul Bellow, making themselves unavailable to the press for several years. Flashing cameras and gossip columns might well suit actors, who need their audience to know them by sight, but they do not suit the essentially private and quiet act of writing.

The Association of American Publishers, which administers The American Book Awards, does not consider publicity a problem, however. In fact, it wants more visibility for its prize. The association is experimenting with gimmicks like stickers, available for sale to book stores, to be put on award-winning books. And for the past three years, the AAP has put on a splashy awards ceremony, with such notables as William F. Buckley Jr. and Barbara Walters giving out TABA prizes.

"I think The American Book Award seems to be modeled on the Academy Awards to a regrettable degree," said Updike. "It's too bad if the book industry has to take itself seriously in that way, to put on a show-biz thing. . . . Although I have objections to the more or less ominous board that sits on the Pulitzer, the nice thing about it is that the administration is so quiet. There is no hoopla, there is no ceremony to it and the notification of the check comes through the mail. I kind of like the dignity of it."

The fear that a lot of prize publicity will result in putting American literature on the level of American movies may have its grounds, but publicity has its benefits. When Czeslaw Milosz and Elias Canetti won their Nobel Prizes, their work became widely available for the first time. And for Madeleine L'Engle, author of A Wrinkle in Time, which won the Newbery Award, the prize ended an agonizing decade of rejection slips and obscurity.

"I had written several trade books including a best seller before I wrote that book for children," she said. "Then for years I couldn't get published at all. That award came to a book which had been rejected by every juvenile publisher in the country. Finally, it outsold even the amount that the Newbery Award guaranteed."

Good sales are not, at least in this country, dependent on prizes. L'Engle's book was vastly popular for reasons beyond its prize, and Joseph Heller and Kurt Vonnegut's works, to give two other examples, have done very well without ever having won prizes.

"I came very close to getting The National Book Award once for Slaughterhouse Five," Vonnegut said, "and then Joyce Carol Oates wrote an even better book. And there you are. But prizes wouldn't mean much for me except as a sales promotion."

John Sayles had also won nominations but no prizes for his 1977 novel, Union Dues, which was nominated for both the National Book Award and the National Book Critics Circle Award. "It was nice publicity," he said. "That's what those awards are all about anyway, free publicity. But I think the nominations legitimized me for other nominations. Awards beget awards."

In contrast to the film industry, literary prizes simply aren't important enough, yet, to sacrifice one's vision to. And, as Singer pointed out at the time he won his Nobel Prize, they shouldn't be.

"When I was a child, I went out and played with a few little boys. They were sitting under a broken umbrella and I wanted also to sit under the umbrella but they didn't let me in. So I said to the children, 'You must let me in, I have new shoes.' And immediately the children decided, if he has new shoes, he has to sit under the broken umbrella.

"I think that grown-up people also behave this way--if he has got the prize, he has become more important. Actually, I am grateful for the prize. It is good for me and for Yiddish and for everybody else perhaps, but no prize changes a man. If a man is changed by a prize, he is not worth a prize."