Better Keep the Twenty Dollars: Incentivizing Innovation in Open Source
Published in National Bureau of Economic Research (Working Paper), 2024
Recommended citation: Conti, A., Gupta, V., Guzman, J., & Roche, M. (2023). Incentivizing Innovation in Open Source: Evidence from the GitHub Sponsors Program. National Bureau of Economic Research. https://doi.org/10.3386/w31668
Media Coverage
- "Open-Source Software Creators: It's Not Just About the Money"
The output of software creators who joined a program that offered rewards to code developers was 54 percent greater than the output of those who did not, but after compensation was given, output dropped by 16 percent... The researchers speculate that being compensated may change the developer's perception of a task, making it appear more difficult and less enjoyable. They further suggest that the intrinsic reward of freely creating and contributing software for public use may be greater than the extrinsic reward of producing it on demand to satisfy a funder's request.
- "Intrinsic Joy Sparks Ideas Better than Cash"
Developers offered the chance to get paid for their work increased their productivity by 54 percent, but once they started receiving compensation, their output fell by 16 percent. The results show that 'users on open source platforms may resemble scientists who are driven by intrinsic motivation and non-pecuniary incentives such as the joy of puzzle solving, peer recognition, and interaction with other scientific community members.'
This paper seeks to understand the effects of the introduction of GitHub Sponsorships on digital innovation.
I work on the project with co-authors Annamaria Conti (IE Business School), Maria Roche (Harvard Business School), and Jorge Guzman (Columbia Business School) - contributing to the data pipeline, analysis, and the experimental setup.
Abstract:
Open source is key to innovation, but we know little about how to incentivize it. In this paper, we examine the impact of a program providing monetary incentives to motivate innovators to contribute to open source. The Sponsors program was introduced by GitHub in May 2019 and enabled organizations and individuals alike to reward developers for their open source work on the platform. To study this program, we collect fine-grained data on about 100,000 GitHub users, their activities, and sponsorship events. Using a difference-in-differences approach, we document two main effects. The first is that developers who opted into the program, which does not entail receiving a financial reward, increased their output after the program’s launch. The second is that the actual receipt of sponsorship has a long-lasting negative effect on innovation, as measured by new repository creation, regardless of the amount of money received. We estimate a similar decline in other community-oriented tasks, but not in coding effort. While the program’s net effect on users’ innovative output appears to be positive, our study shows that receiving an extrinsic reward may crowd out developers’ intrinsic motivation, diverting their effort away from community and service-oriented activities on open source.