Competitive crowdfunding under asymmetric quality information

He, Li; Cao, Erbao

doi:10.1007/s10479-021-03939-y

Cited by 8 publications

(3 citation statements)

References 31 publications

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“…, 2014). Competitors of the focal project convey rich information containing quality signals to pursue limited financial resources, which in turn allows investors to weigh and compare projects' merits (Li and Cao, 2021). At the focal project level, sources of information disclosure available to successive investors include project information that has been updated by entrepreneurs and other investors' comments (Song et al.…”

Section: Introductionmentioning

confidence: 99%

“…At the platform ecosystem level, investors' decision outcomes depend critically on how the platform environment is shaped by other participants' behavior, such as competition intensity (Kretschmer et al, 2020;Zhou et al, 2014). Competitors of the focal project convey rich information containing quality signals to pursue limited financial resources, which in turn allows investors to weigh and compare projects' merits (Li and Cao, 2021). At the focal project level, sources of information disclosure available to successive investors include project information that has been updated by entrepreneurs and other investors' comments (Song et al, 2019).…”

Section: Introductionmentioning

confidence: 99%

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Rethinking investors' herding behavior under the conditions of reward-based crowdfunding platform

Zhu

Liu

Zhang

2022

IMDS

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PurposeReward-based crowdfunding, an emerging financing channel for SMEs, has attracted significant attention from scholars and practitioners. Scholars have mostly explored investors’ herding behavior in platforms to better understand investors’ decision-making mechanisms and management of funding projects. However, current evidence is inconsistent regarding herding behavior during the funding process. This study proposes prior funding performances have a nonlinear effect on subsequent funding performance and that this nonlinear relationship is conditional on competition intensity and information disclosure.Design/methodology/approachBased on objective data collected from a dominant reward-based crowdfunding platform in China, this study follows a panel ordinary least squares (OLS) model to estimate the effects of prior funding performance on the subsequent funding performance and the moderating role of environmental factors (i.e. competition intensity and information disclosure) in a given platform.FindingsThe results show prior funding performance had an inverted U-shaped effect on subsequent performance; this inverted U-shaped relationship was attenuated when the number of interactive messages was larger and competition was more intense, and it was strengthened when information updates were more frequent.Originality/valueThe effects of prior funding performance on subsequent performance at different stages of the fundraising process and under different platform environments remains unclear. The authors revisit the varying viewpoints in existing research and propose that the enhancement and substitution effects of prior funding performance are dominant at different funding stages. Overall, the results of this study highlight that the crowdfunding platform environment may become a boundary condition for investors' herding behavior.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Rethinking investors' herding behavior under the conditions of reward-based crowdfunding platform

Zhu

Liu

Zhang

2022

IMDS

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“…Recently, the research on pricing strategy has been extended to the situation of information asymmetry and competition. [33,7,22,36,37]. Some researchers studies mechanism selection in crowdfunding.…”

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confidence: 99%

Platform contract selection and coordination contract design in reward-based crowdfunding

Zhou

Wang

et al. 2023

JIMO

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<p style='text-indent:20px;'>As a new financing method, crowdfunding has alleviated the capital pressure for start-ups, and has attracted extensive attention of scholars. As an intermediary, crowdfunding platforms obtain benefits from providing services. However, the way of charging commission fees still remains a problem for platforms. This paper investigates the impacts of three service contracts, i.e., revenue sharing contract, per-unit fee contract, and fixed fee contract on the creator and platform. Using backward induction, we derive equilibrium results and get some conclusions. First, we find that under fixed fee contract, due to the trade-off between commission fee and crowdfunding success probability, the platform can only make decisions according to first-order conditions, and get partial profits from the creator. This contradicts the traditional view that the fixed fee contract allows leaders to get all the follower's profits in a stackelberg game. Further, we find that compared with revenue sharing contract and per-unit fee contract, the fixed fee contract is mostly although, not always worse (better) for the platform and system (the creator). Third, in the case of consumer homogeneity, we prove the equivalence of revenue sharing contract and per unit fee contract. However, we find that the efficiency of revenue sharing contract decreases when quality is endogenous, while when consumers are heterogeneous, the advantage of per unit fee contract for the platform decreases. In addition, we design a two-part tariff contract and prove that it can achieve coordination when the platform bears partial fixed cost. The two-part tariff contract can simultaneously improve the benefits of all parties with the appropriate parameters.</p>

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