Induction times in ignition of spatially homogeneous hydrogen/air mixtures in finite size reactors (local hot spots) are studied using forty irreversible reactions among nine chemical species. Solutions are obtained using a continuous time Monte Carlo algorithm along with a new lumping technique. The effect of reactor size on induction time is examined at 1 atm for various temperatures. It is shown that for fuels with a slow initiation reaction and a chain-branching mechanism that can lead to explosion, strong inhibiting finite size effects on ignition exist even in relatively large size microreactors. As an example, at 1000 K the induction time in a 0.1 mu m(3) reactor is larger than the corresponding continuum limit by two orders of magnitude. An analytical criterion which describes the minimum reactor size above which finite size effects on induction time are of secondary importance is proposed. Contrary to systems in equilibrium, microreactors exhibit maximum fluctuations in induction time at intermediate sizes and close to the ignition temperature separating the slow from the fast reaction subspace. A new microscopic reaction path analysis which identifies the reactions controlling ignition is proposed. Implications for ignition of laminar and turbulent flames are discussed.