Hedonic value and crowdfunding project performance: a propensity score matching-based analysis

Liang Zhao and Tsvi Vinig

Review of Behavioral Finance, 2017, vol. 9, issue 2, 169-186

Abstract: Purpose - In the existing literature on crowdfunding project performance, previous studies have given little attention to the impact of investors’ hedonic value and utilitarian value on project results. In a crowdfunding setting, utilitarian value is somehow hard to satisfy due to information asymmetry and adverse selection problem. Therefore, the projects with more hedonic value can be more attractive for potential investors. Lucky draw is a method to increase consumer hedonic value, and it can influence investors’ behavior as a result. The authors hypothesize that projects with hedonic treatment (lucky draw) may have higher probability to win their campaign than others. The paper aims to discuss these issues. Design/methodology/approach - A unique self-extracted two-year Chinese crowdfunding platform real data set has been applied as the analysis sample. The authors first employ propensity score matching methods to control for the endogeneity of hedonic treatment adoption (lucky draw). The authors then run OLS regression and probit regression in order to test the hypotheses. Findings - The analysis suggests a significant positive relationship not only between project lottery adoption and project results but also between project lottery adoption and project popularity. Originality/value - The results suggest that an often ignored factor – hedonic treatment (lucky draw) – can play an important role in crowdfunding project performance.

Keywords: Entrepreneurship; Crowdfunding; Hedonic value; Project performance; Propensity score matching (PSM) (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

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:eme:rbfpps:rbf-09-2016-0059

DOI: 10.1108/RBF-09-2016-0059

Access Statistics for this article

Review of Behavioral Finance is currently edited by Professor Gulnur Muradoglu

More articles in Review of Behavioral Finance from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().