Aiming for the Goal: Contribution Dynamics of Crowdfunding

106 Pages Posted: 28 May 2019 Last revised: 20 Mar 2023

See all articles by Joyee Deb

Joyee Deb

Yale School of Management

Aniko Oery

Yale University - Cowles Foundation

Kevin Williams

Yale School of Management; Yale University - Cowles Foundation

Multiple version iconThere are 2 versions of this paper

Date Written: May 2019

Abstract

We study a dynamic contribution game where investors seek private benefits that are offered in exchange for contributions and a single, publicly-minded donor values project success. We show that donor contributions serve as costly signals that encourage socially-productive contributions by investors who face a coordination problem. Investors and the donor prefer different equilibria but all benefit in expectation from the donor’s ability to dynamically signal his valuation. We explore various contexts in which our model can be applied and delve empirically into the case of Kickstarter. We calibrate our model and quantify the coordination benefits of dynamic signaling in counterfactuals.

Suggested Citation

Deb, Joyee and Oery, Aniko and Williams, Kevin, Aiming for the Goal: Contribution Dynamics of Crowdfunding (May 2019). NBER Working Paper No. w25881, Available at SSRN: https://ssrn.com/abstract=3394670

Joyee Deb (Contact Author)

Yale School of Management ( email )

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Aniko Oery

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States

Kevin Williams

Yale School of Management ( email )

493 College St
New Haven, CT CT 06520
United States

HOME PAGE: http://som.yale.edu

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States

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