The Role of Provision Points in Online Crowdfunding

• 成果类型: Article
• 署名作者: Burtch, Gordon; Hong, Yili; Liu, De
• 署名单位: University of Minnesota System; University of Minnesota Twin Cities; Microsoft; Arizona State University; Arizona State University-Tempe; Arizona State University; Arizona State University-Tempe; University of Minnesota System; University of Minnesota Twin Cities; University of Minnesota System; University of Minnesota Twin Cities
• 刊物名称: JOURNAL OF MANAGEMENT INFORMATION SYSTEMS
• ISSN/ISSBN: 0742-1222
• DOI: 10.1080/07421222.2018.1440764
• 发表日期: 2018
• 页码: 117-144
• 关键词: public-goods; EMPIRICAL-EXAMINATION; private provision; MARKETS; INFORMATION; platforms; mechanism; networks; DYNAMICS; BEHAVIOR

摘要

Extending recent work on market mechanisms in new fintech offerings, we explore the implications of a key mechanism in online crowdfunding-the use of a provision point. Under a provision point mechanism (otherwise known as all-or-nothing or fixed fundraising scheme), the fundraiser, typically an entrepreneur, only receives funds pledged toward his or her campaign if a preregistered fundraising target is met, rather than keeping everything that is raised. Provision points may weaken contributors' reliance on prior capital accumulation for judging a project's potential for success, by eliminating their concerns about a partial fundraising outcome and by signaling the project or entrepreneur's quality. Yet, provision points may also induce attention to prior capital accumulation, because the materialization of one person's contribution depends explicitly on sufficient contributions from others (a network effect). We assess this tension empirically, leveraging proprietary data from a leading crowdfunding platform that allows entrepreneurs to opt into a provision point. We consider the effects of prior capital accumulation on visitors' conversion and contribution decisions, and the moderating influence of a provision point. We find that provision points weaken the association between prior capital accumulation and visitor contribution, implying a reduction in potential herd behavior.