In or out? Crowding effects in public goods with private gifts: Evidence from crowdfunding

Anna Bernard and Marco Gazel

Journal of Economic Behavior & Organization, 2025, vol. 235, issue C

Abstract: How do cumulative contributions influence subsequent giving to public goods that offer private gifts? While prior research has examined contribution dynamics in fundraising, the role of excludability — the property of preventing noncontributors from accessing the good — remains largely unexplored. We use comprehensive data from a reward-based crowdfunding platform to show that the excludability of a project significantly shapes its contribution pattern. We introduce two novel measures of excludability: one based on a good’s inherent characteristics and another derived from the geographic distribution of backer-project distances. Our analysis reveals that more excludable goods (such as local projects and tangible products) exhibit stronger crowding-in effects, whereas less excludable ones (such as global projects and journalism) experience crowding-out effects. Although crowdfunding platforms systematically highlight cumulative contributions, our findings suggest that fundraisers should emphasize this information, particularly for excludable goods, but not for the least excludable ones.

Keywords: Fundraising; Public good; Excludability; Altruism; Crowdfunding (search for similar items in EconPapers)
JEL-codes: C99 D64 H40 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:235:y:2025:i:c:s0167268125001428

DOI: 10.1016/j.jebo.2025.107023

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