The article provides a comprehensive analysis of bug bounty programs, offering insights into their effectiveness in bolstering cybersecurity across various industries. The thorough literature review highlights the growing importance of bug bounties as a means for companies, particularly smaller ones, to mitigate cybersecurity risks amidst a global shortage of cybersecurity professionals. By leveraging empirical data from HackerOne’s database, the study addresses key factors influencing bug bounty program outcomes, including program age, industry, brand profile, bounty amount, time to resolution, revenue, scope, and the distinction between private and public programs.

The findings presented in the article are particularly enlightening. The estimation of the price elasticity of hackers, between 0.1 and 0.2, suggests that hackers are relatively price-insensitive, indicating that even companies with limited resources can derive value from bug bounty programs. Furthermore, the study reveals that a company’s size and profile do not significantly impact the number of vulnerability reports received, highlighting the accessibility of bug bounties to organizations of varying scales. However, the observation that finance, retail, and healthcare companies receive fewer reports warrants further investigation, as it suggests potential industry-specific challenges in bug discovery.

Moreover, the article sheds light on the impact of program age, indicating a decline in the number of valid reports over time, emphasizing the importance of program evolution and scope expansion to sustain hacker engagement. Additionally, the discussion on new programs’ negligible effect on existing programs challenges conventional economic theories of competition, suggesting potential positive network effects within bug bounty platforms.

Overall, the study contributes significantly to understanding bug bounty programs’ efficacy in enhancing cybersecurity resilience. By addressing the limitations of previous research and employing rigorous empirical methods, the article provides valuable insights for policymakers, cybersecurity professionals, and organizations seeking to leverage bug bounty programs to bolster their security posture worldwide.