How much is too much? The effects of information quantity on crowdfunding performance

Abstract

We explore the effects of the quantity of information on the tendency to contribute to crowdfunding campaigns. Using the crowdfunding platform Kickstarter, we analyze the campaign descriptions and the performance of over 70,000 projects. We look empirically at the effect of information quantity (word count) on funding success (as measure by amount raised and number of backers). Within this empirical approach, we test whether an excessive amount of information will affect funding success. To do so, we test for the non-linearity (quadratic) effect of our independent variable (word count) using regression analysis. Consistent with the hypothesis that excess information will negatively affect funds raised and number of contributors, we observe a consistent U-shaped relationship between campaign text length and overall success which suggest that an optimal number of words exists within crowdfunding texts and that going over this point will reduce a project’s chance of fundraising success.

Research on the Effects of Information Description on Crowdfunding Success within a Sustainable Economy—The Perspective of Information Communication

“…Ahlers et al [21] revealed that the amount of word has a positive effect on the crowdfunding success. Bi et al [29], as well as Moy et al [30], also supported the positive influence of words. Therefore, increasing the word count within the range of optimal number of words is beneficial to crowdfunding.…”

“…In this situation, the demand for processing too much information may discourage backers from supporting crowdfunding projects [26]. Therefore, excess information will have negative effects on crowdfunding success [30]. Hence, we propose the following hypotheses: Hypothesis 1a.…”

“…Furthermore, using multiple modes to describe information may generate a higher level of communication efficiency compared with using separate text or image information [15]. Hence, in our study, word count refers to the total number of words in project description [12,15,24,30,82].…”

“…Finally, how the information of the projects is presented, namely the project's information description, has further been noted as an impactor that must be considered. In summary, previous studies have suggested three dimensions of information description, including information quantity (how many words [12,15,23,27,[29][30][31][32], pictures [23,27,31,32], and videos [23,27,29,31] are used to describe the project), information quality (to what extent the project information is readable, namely readability [12]), and the frequency of information update, namely updates [1,17,31,32] and information attitude (the backers' opinions or questions about the projects and the creators' replies are all reflected in the comments [15,29,31]. According to the prior literatures (as shown in Table A1), we can conclude that the effect of creators' related factors and the internal characteristics of projects on crowdfunding success have been fully verified.…”

“…First, most of the related empirical studies have only focused on one or two dimensions of information description. Some have only examined the effect of information quantity [22,27,29,30,33,34], some have only concerned information quality [35][36][37], and some have only studied information attitude [38,39]. Second, although few researchers have considered all the three dimensions of information description as antecedents of crowdfunding success, they have only focused on one or two aspects of each dimension of information description.…”