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Aiming for the Goal: Contribution Dynamics of Crowdfunding

Joyee Deb (), Aniko Oery () and Kevin R. Williams
Additional contact information
Joyee Deb: Cowles Foundation, Yale University
Aniko Oery: Cowles Foundation, Yale University
Kevin R. Williams: Cowles Foundation, Yale University, https://som.yale.edu/faculty/kevin-r-williams

Authors registered in the RePEc Author Service: Aniko Öry

No 2149R, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We study reward-based crowdfunding, a new class of dynamic contribution games where a private good is produced only if the funding goal is reached by a deadline. Buyers face a problem of coordination rather than free-riding. A long-lived donor may alleviate this coordination risk, signaling his wealth through dynamic contributions. We characterize platform-, donor-, and buyer-optimal equilibrium outcomes, attained by Markov equilibria with simple donation strategies. We test the model's predictions using high-frequency data collected from the largest crowdfunding platform, Kickstarter. The model 'ts the data well, especially for predictions concerning comparative statistics, donation dynamics, and properties of successful campaigns.

Keywords: Crowdfunding; Contribution Games; Dynamic Models; Kickstarter (search for similar items in EconPapers)
JEL-codes: C73 L26 M13 (search for similar items in EconPapers)
Pages: 105 pages
Date: 2018-12, Revised 2021-01
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Related works:
Working Paper: Aiming for the Goal: Contribution Dynamics of Crowdfunding (2019) Downloads
Working Paper: Aiming for the Goal: Contribution Dynamics of Crowdfunding (2018) Downloads
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