Incentivizing Crowds and Intergroup Spillovers: Evidence from the Internet Bug Bounty Program

Online communities can create complex knowledge products, such as software, by leveraging collaboration and division of labor between their core members and the crowd across tasks. Recent literature has focused on how incentives stimulate crowd contributions. Limited attention has been paid to potential intergroup spillovers, that is, how incentivizing crowd contributions affects nonincentivized core members’ contributions. In this paper, we examine how core members of the Python developer community responded to the Internet Bug Bounty program, an initiative that offers monetary incentives for bug reporting by the crowd. Using a difference-in-differences strategy and the Java community as the control group, we find that the Python core members reduced their contributions to the incentivized task of bug reporting after the program’s implementation. Importantly, they also reduced their contributions to the nonincentivized task of enhancement reporting, a critical knowledge creation task for improving Python. Such reduction has led to a decline in the overall contributions of enhancement reports and related code commits to Python. Further analysis suggests that the negative intergroup spillover of the incentive on core members’ nonincentivized task contributions can plausibly be explained by reduced intertask learning. Our study offers implications for crowdsourcing, the design of incentives for digital public goods, and task delegation.

This paper was accepted by Anindya Ghose, information systems.

Funding: This research is supported in part by the HKSAR General Research Fund Project 16503620.

Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2024.04544.