What’s in a “Username”? The Effect of Perceived Anonymity on Herding in Crowdfunding

Yang Jiang (), Yi-Chun (Chad) Ho (), Xiangbin Yan () and Yong Tan ()
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Yang Jiang: School of Business, Nanjing University, Nanjing, 210093 Jiangsu, China
Yi-Chun (Chad) Ho: School of Business, George Washington University, Washington, District of Columbia 20052
Xiangbin Yan: School of Economics and Management, University of Science and Technology Beijing, 100083 Beijing, China
Yong Tan: Michael G. Foster School of Business, University of Washington, Seattle, Washington 98195

Information Systems Research, 2022, vol. 33, issue 1, 1-17

Abstract: This research examines the role of perceived anonymity in shaping herding behavior in online crowdfunding markets. Drawing on theories from social psychology literature, we argue that a lender forms different credibility perceptions toward preceding peers based on their perceived anonymity state; the lender then uses such perceptions to adjust the lender’s herding momentum toward them. Using data collected from a leading debt-based crowdfunding platform, we classify an individual’s username as either anonymous or real-seeming, with the latter referring to as a user identification that seems to reveal one’s real name. The results show that successors demonstrate weaker herding momentum toward predecessors who are presented with real-seeming usernames than anonymous ones. This finding, which we attribute to a lower extent of perceived credibility derived from a nonconforming behavior, challenges the conventional wisdom that considers anonymity a negative factor for source credibility. We further show that the uncovered positive effect of perceived anonymity on herding is accentuated in the early stage of the fundraising period; nevertheless, we find no such discrepancies between listings that are assigned with high-risk and low-risk credit grades. Our study contributes to the literatures dealing with anonymity and herding in online environments.

Keywords: crowdfunding; herding; observational learning; anonymity; privacy; source credibility (search for similar items in EconPapers)
Date: 2022
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