 Out of control or right on the money? Funder self-efficacy and crowd bias in equity crowdfundingRegan M. Stevenson, Michael P. Ciuchta, Chaim Letwin, Jenni M. Dinger and Jeffrey B. Vancouver Journal of Business Venturing, 2019, vol. 34, issue 2, 348-367 Abstract: Our findings extend the entrepreneurship literature by highlighting the mechanism through which self-efficacy can hinder rather than enhance performance in entrepreneurial settings. Using two complementary experimental studies and a third quasi-experimental field study on equity crowdfunding decisions, we demonstrate that self-efficacy is negatively related to decision-making performance. This relationship is mediated by reduced searching effort. Our research also indicates that high self-efficacy funders tend to exhibit a “crowd bias” whereby they over-weight the opinions of the crowd, increasing the likelihood that they will fund poor quality ventures when such ventures are favored by the crowd. We introduce the term crowd bias and explore its effects, establishing that social indicators in the form of crowd cues can exasperate the negative effects of self-efficacy. Keywords: Self-efficacy; Control theory; Entrepreneurship; Equity crowdfunding; Experiment (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:34:y:2019:i:2:p:348-367 DOI: 10.1016/j.jbusvent.2018.05.006 Access Statistics for this article Journal of Business Venturing is currently edited by S. Venkataraman More articles in Journal of Business Venturing from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.