An Empirical Analysis of a Crowdfunding Platform
27 Pages Posted: 22 Oct 2015
Date Written: September 30, 2015
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. 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.
Keywords: Crowdfunding, Social learning, Value of information, Free-riding, Voluntary contribution
JEL Classification: D82, D83, G11, G14, L26, L81
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