Detecting Fraudulent Behavior on Crowdfunding Platforms: The Role of Linguistic and Content-Based Cues in Static and Dynamic Contexts

Journal of Management Information Systems 33 (2), 421-455

42 Pages Posted: 9 Nov 2016 Last revised: 22 Jun 2017

See all articles by Michael Siering

Michael Siering

Goethe University Frankfurt Faculty of Economics and Business Administration

Jascha-Alexander Koch

University Siegen - School of Economic Disciplines; University of Siegen

Amit V. Deokar

University of Massachusetts Lowell - The Robert J. Manning School of Business

Date Written: May 10, 2016

Abstract

Crowdfunding platforms offer founders the possibility to collect funding for project realization. With the advent of these platforms, the risk of fraud has risen. Fraudulent founders provide inaccurate information or pretend interest toward a project. Within this study, we propose deception detection support mechanisms to address this novel type of Internet fraud. We analyze a sample of fraudulent and non-fraudulent projects published at a leading crowdfunding platform. We examine whether the analysis of dynamic communication during the funding period is valuable for identifying fraudulent behavior — apart from analyzing only the static information related to the project. We investigate whether content-based cues and linguistic cues are valuable for fraud detection. The selection of cues and the subsequent feature engineering is based on theories in areas of communication, psychology, and computational linguistics. Our results should be helpful to the stakeholders of crowdfunding platforms and researchers of fraud detection.

Keywords: Fraud Detection, Internet Deception, Crowdfunding, Linguistic Cues, Content-Based Cues

Suggested Citation

Siering, Michael and Koch, Jascha-Alexander and Deokar, Amit, Detecting Fraudulent Behavior on Crowdfunding Platforms: The Role of Linguistic and Content-Based Cues in Static and Dynamic Contexts (May 10, 2016). Journal of Management Information Systems 33 (2), 421-455, Available at SSRN: https://ssrn.com/abstract=2866922

Michael Siering

Goethe University Frankfurt Faculty of Economics and Business Administration ( email )

Grueneburgplatz 1
Frankfurt am Main, 60323
Germany

Jascha-Alexander Koch (Contact Author)

University Siegen - School of Economic Disciplines ( email )

Unteres Schloss
Post Box 29
Siegen, 57072
Germany

University of Siegen ( email )

Hoelderlinstrasse 3
57068 Siegen, NRW 57068
Germany

Amit Deokar

University of Massachusetts Lowell - The Robert J. Manning School of Business ( email )

1 University Ave
Pulichino Tong Business Center 436
Lowell, MA 01854
United States
9789345524 (Phone)

HOME PAGE: http://www.uml.edu/MSB/faculty/Deokar-Amit.aspx

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