Pricing and package size decisions in crowdfunding
Yangguang Zhu and
Transportation Research Part E: Logistics and Transportation Review, 2020, vol. 143, issue C
Pricing and package size decisions are critical to the success or failure of reward-based crowdfunding projects; the importance of these decisions has been overlooked in the existing crowdfunding literature. In this paper, we develop a two-period model to study pricing and package size decisions in a crowdfunding game where a creator sells perishable products to sequentially arriving consumers. Consumers are heterogeneous in their usages and valuations and they get utility by consuming products rather than owning them. The creator can choose to provide a product menu that contains two types of packages or only provide one type of package to match the consumers’ usages and valuations. The project would succeed only when the project target is achieved during the funding period; otherwise, the transaction would be canceled. We show that consumers’ usages and valuations have a large impact on deciding the creator’s optimal pricing strategy and project target regardless of whether the exogenous or endogenous package sizes are used. In addition, market outcomes depend not only on the optimal pricing strategy but also on the optimal project target. Moreover, the creator can benefit from providing two types of packages instead of one type of package. Finally, the creator can strategically reduce the size of the large package and narrow the gap between the two packages to attract more funds.
Keywords: Crowdfunding; Sequential game; Package size; Pricing (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:transe:v:143:y:2020:i:c:s1366554520307407
Ordering information: This journal article can be ordered from
http://www.elsevier. ... 600244/bibliographic
Access Statistics for this article
Transportation Research Part E: Logistics and Transportation Review is currently edited by W. Talley
More articles in Transportation Research Part E: Logistics and Transportation Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().