Exploring the subjective nature of crowdfunding decisions
Jie Ren,
Viju Raghupathi and
Wullianallur Raghupathi
Journal of Business Venturing Insights, 2021, vol. 15, issue C
Abstract:
Project funding performance which determines the rise and fall of the crowdfunding platform, is largely governed by the subjective behavior of investors. Leveraging the perspective of attribute substitution theory, we focus on two factors that affect the subjective funding behaviors of investors: emotional language in the project description and risky funding choices of prior investors. According to the same theory, we classify the projects as either hedonic or utilitarian, identifying whether the association between the factors and funding success of projects vary for hedonic vs. utilitarian projects. Using Kickstarter data, our analysis shows a positive association between the risk-seeking investor ratio and project success for hedonic projects. In addition, it identifies a positive association between the extent to which arousal words are used in project descriptions and project success for all projects. Thus, both positive associations are stronger for hedonic projects than for utilitarian projects. Our findings suggest that investors in crowdfunding contexts do not always make rational decisions in funding projects. This has implications for how a project is positioned within the crowdfunding solicitation marketplace.
Keywords: Attribute substitution perspective; Emotional arousal; Entrepreneur; Hedonic and utilitarian project; Kickstarter; Reward-based crowdfunding; Risk-seeking backer ratio (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (6)
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2352673421000111
Full text for ScienceDirect subscribers only
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eee:jobuve:v:15:y:2021:i:c:s2352673421000111
DOI: 10.1016/j.jbvi.2021.e00233
Access Statistics for this article
Journal of Business Venturing Insights is currently edited by Dimo Dimov
More articles in Journal of Business Venturing Insights from Elsevier
Bibliographic data for series maintained by Catherine Liu (repec@elsevier.com).