Launching for success: The effects of psychological distance and mental simulation on funding decisions and crowdfunding performance

Stefan Rose, Daniel Wentzel, Christian Hopp and Jermain Kaminski

Journal of Business Venturing, 2021, vol. 36, issue 6

Abstract: This research examines how potential backers form mental representations of products in reward-based crowdfunding campaigns, and how these representations affect funding decisions and campaign performance. To test our framework, we conducted four experiments and also drew on a sample of 961 Kickstarter campaigns. Our results show that two campaign characteristics – the product's development stage and the indicated time to product delivery – determine the psychological distance that supporters experience in response to a campaign, and that psychological distance, in turn, inhibits individual campaign contributions and cumulative campaign success. Furthermore, we find that encouraging supporters to imagine the benefits of product usage is an effective means to increase support for campaigns that elicit high psychological distance.

Keywords: Crowdfunding; New product development; Entrepreneurial financing; Construal level theory; Psychological distance; Mental simulation (search for similar items in EconPapers)
JEL-codes: G24 G32 G41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:36:y:2021:i:6:s0883902618308619

DOI: 10.1016/j.jbusvent.2020.106021

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