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An Empirical Analysis of a Crowdfunding Platform

Author

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  • Jin-Hyuk Kim

    (University of Colorado at Boulder, Department of Economics, 256 UCB, Boulder, CO 80309, USA)

  • Peter Newberry

    (Pennsylvania State University, Department of Economics, 510 Kern Building, University Park, PA 16802)

  • Calvin Qiu

    (ICF International, 19/F Heng Shan Centre, 145 Queen's Road East, Wan Chai, Hong Kong)

Abstract

Crowdfunding, a fundraising mechanism in which monetary contributions are raised from a large number of people, is booming and impacting government policy. We study two features of a well-known crowdfunding platform, Kickstarter.com. First, we study the role of observable information in determining whether or not a donor contributes to the project. Second, we study the effect of the all-or-nothing nature of donations. Our counterfactual analyses indicate that the observability of donor information increases the expected quality of funded projects while the conditionality of pledges decreases it.

Suggested Citation

  • Jin-Hyuk Kim & Peter Newberry & Calvin Qiu, 2015. "An Empirical Analysis of a Crowdfunding Platform," Working Papers 15-12, NET Institute.
    • Handle: RePEc:net:wpaper:1512
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    File URL: http://www.netinst.org/Kim_Newberry_Qiu_15-12.pdf
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    References listed on IDEAS

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    Cited by:

    1. Zhuoxin Li & Jason A. Duan & Sam Ransbotham, 2020. "Coordination and Dynamic Promotion Strategies in Crowdfunding with Network Externalities," Production and Operations Management, Production and Operations Management Society, vol. 29(4), pages 1032-1049, April.
    2. Stefano Cascino & Maria Correia & Ane Tamayo, 2019. "Does Consumer Protection Enhance Disclosure Credibility in Reward Crowdfunding?," Journal of Accounting Research, Wiley Blackwell, vol. 57(5), pages 1247-1302, December.
    3. Vulkan, Nir & Åstebro, Thomas & Sierra, Manuel Fernandez, 2016. "Equity crowdfunding: A new phenomena," Journal of Business Venturing Insights, Elsevier, vol. 5(C), pages 37-49.
    4. Marco Bade & Martin Walther, 2021. "Local preferences and the allocation of attention in equity-based crowdfunding," Review of Managerial Science, Springer, vol. 15(8), pages 2501-2533, November.
    5. Martin Walther & Marco Bade, 2020. "Observational learning and willingness to pay in equity crowdfunding," Business Research, Springer;German Academic Association for Business Research, vol. 13(2), pages 639-661, July.

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    More about this item

    Keywords

    Crowdfunding; Social learning; Value of information; Free-riding; Voluntary contribution;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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