The Attraction Effect in Crowdfunding

Markus Weinmann (), Abhay Nath Mishra (), Lena Franziska Kaiser () and Jan vom Brocke ()
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Markus Weinmann: University of Cologne, 50923 Cologne, Germany; Erasmus University Rotterdam, 3062 PA Rotterdam, Netherlands
Abhay Nath Mishra: Debbie and Jerry Ivy College of Business, Information Systems & Business Analytics, Iowa State University, Ames, Iowa 50011
Lena Franziska Kaiser: University of Liechtenstein, 9490 Vaduz, Liechtenstein
Jan vom Brocke: University of Liechtenstein, 9490 Vaduz, Liechtenstein

Information Systems Research, 2023, vol. 34, issue 3, 1276-1295

Abstract: At the core of reward-based crowdfunding (RBC) is the reward menu. Carefully constructed reward menus can impact fundraising success significantly. For example, an oft-discussed approach to influencing purchasing decisions is introducing an irrelevant option into a consumer’s choice set—a decoy option—making another, often more valuable, option more attractive. This phenomenon is also known as the attraction effect. Prior research, however, has found mixed evidence for its occurrence in applied settings because it has largely employed simplified attribute presentation—with only numeric attributes such as ratings—and hypothetical choices, which had no economic consequences. Hence, researchers questioned the practical significance of the attraction effect. In this paper, we examine whether the attraction effect will manifest in an applied setting such as the crowdfunding context, where product attributes are both numerical (e.g., price) and nonnumerical (e.g., content of a product), choices have economic consequences, and organizations offer several menu options to consumers. We draw upon the salience theory and propose four hypotheses, suggesting that introducing an irrelevant decoy option in choice sets, created digitally in reward menus, may lead backers to choose higher-priced options. We conducted seven online experiments and a field study on Kickstarter (in total, n = 3,998 participants), with increasing levels of similarity with RBC. We found that the attraction effect significantly shifted backers’ preferences from a low-priced to a high-priced reward by 18.8% to 28.2% in different settings, highlighting the substantial potential of properly designed digital reward menus to influence funders’ choices. Given that researchers have expressed skepticism about the attraction effect in applied settings, our results are particularly significant, suggesting that information systems design can influence choice behavior. This research makes targeted contributions to the literature on crowdfunding, the attraction effect, and digital design.

Keywords: attraction effect; crowdfunding; salience theory; menu design; behavioral economics; digital markets; mixed methods; experiments; decoy; Bayesian analysis (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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