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The experience matters: participation-related rewards increase the success chances of crowdfunding campaigns

By Tobias Regner and Paolo Crosetto

Abstract

Crowdfunding recently emerged as an alternative funding channel for start-ups, creative artists and social endeavors. On specialized web platforms, project creators ask the crowd for support and provide in return a set of rewards, modulated according to the amount of support pledged. Our study investigates the role of self- and social-image enhancing rewards in determining project success. Using data from 346 projects hosted by Startnext, the biggest crowdfunding platform in Germany, we show that providing higher shares of reward levels that let pledgers participate in and experience the project is correlated with project success

Topics: social-image, self-image, reward levels, identity, crowdfunding, entrepreneurial finance, donations, JEL: L - Industrial Organization/L.L2 - Firm Objectives, Organization, and Behavior/L.L2.L26 - Entrepreneurship, JEL: D - Microeconomics/D.D0 - General/D.D0.D03 - Behavioral Microeconomics: Underlying Principles, JEL: G - Financial Economics/G.G3 - Corporate Finance and Governance/G.G3.G32 - Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill, [SHS.ECO]Humanities and Social Sciences/Economics and Finance
Publisher: HAL CCSD
Year: 2017
OAI identifier: oai:HAL:hal-01527150v1
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