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Crowdfunding, Efficiency, and Inequality

Hans Peter Grüner and Christoph Siemroth

Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We show how decentralized individual investments can efficiently allocate capital to innovating firms via equity crowdfunding. We develop a model where consumers have privately known consumption preferences and may act as investors. Consumers identify worthwhile investments based on their own preferences and invest in firms whose product they like. An efficient capital allocation is achieved if all groups of consumers have enough wealth to invest.

JEL-codes: D82 D53 D24 (search for similar items in EconPapers)
Date: 2017
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https://www.econstor.eu/bitstream/10419/168081/1/VfS-2017-pid-2098.pdf (application/pdf)

Related works:
Journal Article: Crowdfunding, Efficiency, and Inequality (2019) Downloads
Working Paper: Cutting out the Middleman: Crowdinvesting, Efficiency, and Inequality (2015) Downloads
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