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Design of Reward Tiers in Crowdfunding: Eschewing Acknowledgments and Prioritizing Promotion

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  • Liangchen Fan
  • Jin Qin
  • Yao Yao

Abstract

This study investigates how reward tier design impacts crowdfunding performance. We innovatively categorize reward tiers into three utilitarian types—basic, promotional, and one‐dollar—and we consider hedonic acknowledgments of types public and personal. By analyzing data from 2471 Kickstarter projects (with 20,183 tiers), we find an inverted U‐shaped relationship between the number of promotional tiers and fundraising performance. In contrast, offering more basic tiers or having a one‐dollar tier hinders fundraising. Counterintuitively, neither public nor personal acknowledgments in reward tiers are positively related to the fundraising performance. These new insights provide guidance for practice in crowdfunding.

Suggested Citation

  • Liangchen Fan & Jin Qin & Yao Yao, 2025. "Design of Reward Tiers in Crowdfunding: Eschewing Acknowledgments and Prioritizing Promotion," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(3), pages 1520-1534, April.
    • Handle: RePEc:wly:mgtdec:v:46:y:2025:i:3:p:1520-1534
    DOI: 10.1002/mde.4450
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    References listed on IDEAS

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