Strategic Interaction Between Crowd and In-house Contributions : Evidence from the Internet Bug Bounty Program

Soliciting undesignated external contributors (“crowd contributors”) to supplement in-housecontributors to tackle business and societal challenges has become a popular trend. However,it remains unclear whether incentivizing crowd contributors affects the work output of inhousecontributors; the factors that may drive this influence are also unknown. To shed lighton these issues, we analyze the experience of a specific information security crowdsourcingprogram, the Internet Bug Bounty (IBB) as a natural experiment. Applying a difference-indifferencesstrategy, we find that the implementation of the IBB has disincentivized in-housecontributors to work on the crowdsourced task (i.e., bug reporting) and their contributions totasks that the IBB incentive does not apply (i.e., enhancement reporting). The evidencesuggests that an increase in competition from crowd contributors and a decrease inopportunities to benefit from inter-task learning collectively account for the decline incontributions by in-house contributors. We evaluate other potential reasons, such as the lossof interest or an excessive number of contributions that in-house contributors need to handleafter the introduction of the IBB, but they cannot explain our empirical findings. We discussthe implications of our findings for crowdsourcing research and practice, incentivizingcontributions to digital public goods, and the future of work