Competitive crowdfunding under asymmetric quality information

He Li and Erbao Cao ()
Additional contact information
He Li: Hunan University
Erbao Cao: Hunan University

Annals of Operations Research, 2023, vol. 329, issue 1, No 23, 657-688

Abstract: Abstract We proposed a framework on how to design the optimal crowdfunding strategy for the competitive creators under quality information asymmetry. And we also considered the platform uses different funding mechanisms (fixed or flexible) and the creators’ different orders of initiation (lead or follow). We find that when high-quality creator initiates first and the degree of quality information asymmetry is low, the optimal price of low-quality creator is negatively correlated with the quality utility and success rate of his own product, but positively correlated with the quality utility and success rate of his competitor’s product. More interestingly, we also show that it is more conducive to maximize the profits of creators to retain quality information asymmetry when high-quality creator initiates crowdfunding first. We also find that when the degree of quality information asymmetry between creators and contributors is high, it is always better that the high-quality creator initiates crowdfunding first, whereas it is better for the low-quality creator to initiate first if the of degree of quality information asymmetry between creators and contributors is low. Finally, when the degree of quality information asymmetry between creators and contributors is very high or very low, the two creators and the platform can obtain higher profits by a fixed mechanism; otherwise, the flexible mechanism is more beneficial to them.

Keywords: Reward-based crowdfunding; Competitive creator; Quality information asymmetry; Funding mechanism; Initiation order (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s10479-021-03939-y Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:annopr:v:329:y:2023:i:1:d:10.1007_s10479-021-03939-y

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-021-03939-y

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().