Prosocial Goal Pursuit in Crowdfunding: Evidence from Kickstarter.com

Abstract

In reward-based crowdfunding, creators of entrepreneurial projects solicit capital from potential consumers to reach a funding goal and offer future products/services in return. We examine consumers’ contribution patterns using a novel dataset of 28,591 projects collected at 30-minute resolution from Kickstarter.com. Extending past research assuming that economic considerations (such as project quality and campaign success likelihood) drive backers’ decisions, we provide the cleanest field evidence so far that consumers also have prosocial motives to help creators reach their funding goals. We find that projects collect funding faster right before (vs. right after) meeting their funding goals because consumers not only are more likely to fund projects, but also contribute greater amounts of money prior to goal attainment. This effect is amplified when the nature of a project tends to evoke consumers’ prosocial motivation and when a project’s creator is a single person. These results suggest that consumers’ prosocial motives not only play a role in reward-based crowdfunding, but also can outweigh the opposing effects of economic factors including rational herding and certainty about campaign success.

Keywords: Goal, Prosocial Motivation, Decision Making, Crowdfunding

JEL Classification: D03, D12, D83