Crowdfunding in a duopoly under asymmetric information
Anton Miglo
MPRA Paper from University Library of Munich, Germany
Abstract:
Traditionally crowdfunding has been used for funding very innovative projects. Recently, however, companies have begun using crowdfunding to finance more traditional products where they compete against other sellers of similar products. One of the major platforms Indiegogo launched several projects consistent with this trend. This paper offers a model of a duopoly where firms can use crowdfunding prior to direct sales. The model is based on asymmetric information between competitors regarding the demand for the product. It provides several implications that have not yet been tested. For example we find that high-demand firms can use crowdfunding to signal their quality.
Keywords: crowdfunding; asymmetric information; reward-based crowdfunding; duopoly; signalling (search for similar items in EconPapers)
JEL-codes: D43 D82 G32 L11 L13 L26 M13 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-cfn, nep-com, nep-ent, nep-gth, nep-ind, nep-mic, nep-pay and nep-ppm
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Citations: View citations in EconPapers (3)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:89016
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