The dynamics of crowdfunding: picking the sucessful project

Linda Salahaldin () and Donia Trabelsi ()
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Linda Salahaldin: IMT-BS - MMS - Département Management, Marketing et Stratégie - TEM - Télécom Ecole de Management - IMT - Institut Mines-Télécom [Paris] - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris]
Donia Trabelsi: IMT-BS - DEFI - Département Droit, Économie et Finances - TEM - Télécom Ecole de Management - IMT - Institut Mines-Télécom [Paris] - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris], LITEM - Laboratoire en Innovation, Technologies, Economie et Management (EA 7363) - UEVE - Université d'Évry-Val-d'Essonne - TEM - Télécom Ecole de Management

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Abstract: With the success of crowdfunding and the increase of the number of on-line platforms, funders have usually the choice between a large number of projects in their field of interest. This paper models the dynamics of crowdfunding from the funder's point of view, especially his decision to fund a project whose campaign is ending or to abandon it for other active projects. We make use of a dynamic programming approach for computing the value of the opportunity given by a platform at a given time and to derive the optimal funding decision. Our numerical results highlight the impact of the different parameters that influence the crowdfunder's choice. We make interesting observations such as the existence of an interval where the campaign duration can be setup for a successful funding.

Keywords: Crowdfunding; Dynamic programming; Funding decision (search for similar items in EconPapers)
Date: 2016-06-26
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Published in 23rd Annual Conference of the Multinational Finance Society (MFS), Jun 2016, Stockholm, Sweden

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02375731

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