Crowdfunding: Literature Study for Communication and Information Asymmetry

Abstract

Advance in technology in most fields and industries brings new and undiscovered evolutions of systems and methods by making transactions and processes more efficient, thus requiring modern and absolutely unique ways of interaction. Crowdfunding can be thought to be the next breakthrough evolution at a point of collision of technology, social networking interactions online and finance.

Triggered by recent financial crisis trust for traditional financial intermediaries had been shaken. Moreover the crowd realized and was pursuing to eliminate financial intermediation and complications in investment market that consumed most of the bounty of capital investments.

Crowdfunding became interesting topic and has shown some signals of future perspectives toward decreasing investment costs as long as facilitating new markets and good opportunities both for small and medium businesses and individual investors.

However as the Crowdfunding specifications and characteristics are in a sense different from other ways of financing, key and fundamental issues such as information asymmetry should be understood and investigated to have a knowledge of the topic.

Keywords: crowdfunding, literature review, information asymmetry, signals, perspective