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Signalling Experience & Reciprocity to Temper Asymmetric Information in Crowdfunding: Evidence from 10,000 Projects

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posted on 2023-08-30, 15:12 authored by William E. Davies, Emanuele Giovannetti
Crowdfunding is a diffused project finance practice for funding early-stage projects by directly involving a large number of people by means of remote interaction through ICT-enabled platforms. Based on the original collection of empirical evidence from 10,000 Kickstarter crowdfunding projects, this paper develops a conceptual framework to understand and estimate the key predictors of success or failure for these funding campaigns. The main focus is on developing and testing specific hypotheses about the role that crowdfunding platforms play in facilitating the activity of signalling to mitigate the negative consequences of asymmetric information both in terms of moral hazard and adverse selection. The developed hypotheses were separated into two main categories, depending on whether signalling originated from the creator of the crowdfunding campaign, or the network supporting the crowdfunding project. Moreover, by providing an original longitudinal database, this paper emphasises the path-dependent nature of crowdfunding processes that together with additional proxies capturing social capital, reputation, patience and ambition, allows a significantly improved understanding and predictability of success or failure of these projects

History

Refereed

  • Yes

Volume

133

Page range

118-131

Publication title

Technological Forecasting and Social Change

ISSN

0040-1625

Publisher

Elsevier

File version

  • Accepted version

Language

  • eng

Legacy posted date

2018-03-19

Legacy creation date

2018-03-19

Legacy Faculty/School/Department

ARCHIVED Lord Ashcroft International Business School (until September 2018)

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