eWOM in reward-based crowdfunding platforms: a behavioral approach

[EN] Electronic word of mouth (eWOM) plays a crucial role in influencing purchasing decisions of consumers in situations governed by asymmetric information. In this context, investors in reward-based crowdfunding platforms might modify their purchasing intentions according to recommendations of peers and/or experts. The goal of this paper is to analyze the power of eWOM to shape consumers’ purchasing decisions. We do so by conducting an experiment through Amazon Mechanical Turk (AMT). This online experimental tool allows for an instant access to a large and culturally diverse subject pool, facilitating behavioral research requiring large amounts of subjects. By recreating a reward-based crowdfunding webpage and tracking how consumers’ choices vary due to recommendations of other buyers and experts, this research confirms eWOM power in modifying purchasing decisions, as well as the prevalence of other buyers’ recommendations over those of experts. Additionally, it is tested AMT as a crowdsourcing platform that enables scholars to carry out online research related to economics and social sciences.Irene Comeig acknowledges financial support from the Spanish Ministry of Economy through grant number ECO2016-75575-R.Comeig Ramírez, I.; Sendra Pons, P. (2020). eWOM in reward-based crowdfunding platforms: a behavioral approach. Editorial Universitat Politècnica de València. 41-49. https://doi.org/10.4995/CARMA2020.2020.11413OCS414

The role of «perceived loss» aversion on credit screening: an experiment

A major characteristic of credit markets is information asymmetry.To combat its problems, as credit rationing, principals can use a menu of contracts to screen clients with different risk level. We conduct a laboratory experiment to address an important question for such settings —does the framing of the offered menu of contracts interfere with the self-selection mechanism? The answer is yes. We find subjects' choices shift when the same (positive) outcomes of the same menu of contracts are presented in two different frames. Subjects exhibit loss aversion in their perception of the positive outcomes below the reference point, and self-selection fails to occur.Uno de los mayores problemas actuales es el racionamiento del crédito, derivado funda- mentalmente de las asimetrías informativas. Para disminuir las asimetrías informativas, los bancos pueden aplicar «screening». Esto es, pueden ofrecer a sus clientes un menú de contratos y, dependien- do de la elección de éstos, inferir su nivel de riesgo. Si las elecciones de los clientes de alto riesgo y de bajo riesgo difieren entre sí, hay autoselección de clientes y, por tanto, «screening». En este artículo presentamos un experimento que examina una cuestión esencial en estos contextos —¿Interfiere el punto de referencia de los clientes en su autoselección?— La respuesta es sí. De hecho, las elecciones cambian cuando los mismos datos (positivos) de los mismos contratos se presentan con una referen- cia diferente. Por ello, proponemos una aproximación teórica derivada de la «Prospect Theory» para explicar nuestros resultados. Observamos una aversión a las pérdidas percibidas que hace fracasar la autoselección

Institutional factors affecting entrepreneurship: A QCA analysis

A country's institutional framework plays a crucial role in promoting entrepreneurship, which drives economic growth. Encouraging a minimum level of certainty in ambiguous environments characterized by risk taking is important. Aware of this importance, we analyze the influence of institutional factors on entrepreneurship development. Specifically, we analyze political stability, government effectiveness, regulatory quality, a robust rule of law, the ease of starting a new business, and the ease of obtaining credit. We develop two models to explain the presence and absence of entrepreneurship. To do so, we apply qualitative comparative analysis (QCA) to a sample of 48 countries using data sourced from the Global Entrepreneurship Monitor and the Global Innovation Index. The results show that the effect of institutional factors on the level of entrepreneurship varies according to the socioeconomic characteristics of each country. They suggest that a wide range of institutional configurations lead to the presence or absence of entrepreneurship. Although entrepreneurship can be found in unfavorable institutional environments, future research should examine how to formalize such environments as a standardized institutional configuration to shift from necessity to opportunity entrepreneurship. Achieving this shift is relevant for innovation and economic development

Conducta gregaria irracional en crowdfunding de recompensa: experimento de campo

el crowdfunding de recompensa es una interesante alternativa de financiación para iniciativas emprendedoras en su etapa inicial. Entre los factores que facilitan el éxito en dichas campañas destaca el comportamiento gregario, es decir, la tendencia a imitar las decisiones de financiación de los anteriores mecenas. El efecto gregario, o de rebaño, se ha demostrado robusto en investigaciones anteriores como un acto racional que apoya campañas con mayor probabilidad de conseguir el objetivo de financiación impuesto, su éxito. En este artículo se va más allá de ese resultado empírico de la literatura previa y se analiza si el comportamiento gregario se produce en el crowdfunding de recompensa incluso sin factor racional, como simple imitación de un comportamiento anterior, independientemente de la motivación racional del éxito del proyecto. Para ello, se diseña y ejecuta un experimento en una campaña real de financiación de un proyecto cultural en la plataforma Verkami, la más potente para proyectos culturales en España. Este experimento de campo permite analizar la causalidad entre las decisiones de los mecenas anteriores sobre el color de una recompensa y las elecciones de los mecenas siguientes. Los resultados muestran claramente un comportamiento gregario no racional en las elecciones de los siguientes mecenas en el crowdfunding de recompensa, que escogen mayoritariamente el mismo color que las aportaciones iniciales. El artículo confirma la importancia del componente no racional en la conducta gregaria en crowdfunding. // reward-based crowdfunding is becoming a very attractive funding alternative for early-stage entrepreneurial initiatives. Among the factors that may influence the success of such campaigns is herd behavior, i.e., the tendency to mimic the funding decisions of previous backers. The herd effect has been shown to be robust in previous research as a rational act that supports campaigns more likely to achieve the funding goal, i.e., to succeed. In this paper we go beyond that empirical result from previous literature and analyze whether herding behavior occurs in reward crowdfunding even without the rational factor, as a simple imitation of previous behavior, regardless of the rational motivation for project success. For this purpose, a field experiment is designed and executed in a real crowdfunding campaign for a cultural project on the Verkami platform, the most powerful platform for cultural projects in Spain. This field experiment is designed to analyze the causality between the decisions of previous backers on the color of a reward and the choices of subsequent backers. The results clearly show non-rational herd behavior in the choices of subsequent patrons in reward crowdfunding, who mostly choose the same color as the initial contributions. Practical implications for campaign design and its possible consequences are discussed in the article

Gender, self-confidence, sports, and preferences for competition

Gender differences in the willingness to compete may explain the small percentage of women in top-level positions in business, science, or politics. This research examines with a fuzzy-set qualitative comparative analysis (fsQCA) the conditions, including gender, that relate to competition preferences and the different paths that may lead to a decision to enter competition. The results of the economic experiment show that no single condition but combinations of characteristics explain preferences for competition. Furthermore, results show that experience in competitive sports relates to a higher self-confidence and increases the willingness to enter in competitive systems. Interestingly, one of the causal paths leading to enter competition is being a risk-averse woman with experience in competitive sports. These results provide insights to guide policy interventions to reduce the gender gap in preferences for competition and, therefore, to rise the percentage of women in top-level positions.The authors thank Pedro Carmona and Alexandre Momparler, University of Valencia for their careful reading and suggestions. Irene Comeig and Ainhoa Jaramillo-Gutiérrez acknowledge the financial support of the Spanish Ministry of EconomyECO2013-46550-R grant

Aprender finanzas conductuales experimentando

[EN] In an ever-changing economic and business environment, it is especially interesting that students learn, and experiment with their own decision-making, about behavioral finance. This experience will provide them with a better understanding of the economic agents’ behavior in different real- life situations (auctions, pricing, negotiations, investing and financing decisions). By experimenting, they acquire solid knowledge about biases, rational and irrational behaviors, and motivations that govern economic life. Controlled economic experiments in the classroom, a gamification learning methodology, allow students to better understand complex economic-financial concepts such as the herding behavior in online markets, credit market failures and possible solutions, or financial price-bubbles. We present the results of applying this gamification experience to the Master in Corporate Finance at the University of Valencia. The results show the students’ deep understanding of concepts and behaviors, and their satisfaction and involvement in the learning process, due to the methodology’s dynamic and ludic nature.[ES] En un entorno económico y empresarial en constante cambio, resulta especialmente interesante que los estudiantes conozcan y experimenten en sus propias decisiones las finanzas conductuales. Ello les permitirá entender mejor el comportamiento de los agentes económicos en distintas situaciones de la vida (subastas, fijación de precios, negociaciones, inversiones y financiación). Experimentando, adquieren conocimientos sólidos sobre los sesgos, los comportamientos racionales e irracionales y las motivaciones que rigen la vida económica. Los experimentos económicos controlados, una metodología de aprendizaje gamificada, permite que los estudiantes aprendan jugando y comprendan mejor conceptos económico-financieros complejos como el comportamiento de manada en los mercados online, los fallos y posibles soluciones del mercado crediticio, o las burbujas financieras de precios. Presentamos los resultados obtenidos al aplicar esta experiencia de innovación docente en el Máster en Finanzas Corporativas de la Universitat de València. Dichos resultados corroboran la profunda comprensión que consiguieron los estudiantes así como su satisfacción e implicación en el proceso de aprendizaje, por su dinamismo y carácter lúdico.Comeig Ramírez, I.; Sendra Pons, P. (2021). Aprender finanzas conductuales experimentando. En IN-RED 2021: VII Congreso de Innovación Edicativa y Docencia en Red. Editorial Universitat Politècnica de València. 149-157. https://doi.org/10.4995/INRED2021.2021.13659OCS14915

Un estudio sobre el papel clasificador de las garantías en los mercados de crédito con información asimétrica

This paper tests Bester's (1985, 1987) prediction about the separating role ofcontracts that involve both interest rates and collateral in credit markets. To test thisprediction we use data from natural credit markets and controlled experiments. Using asample of credits to small and medium size firms in Valencia, Spain, we relate twodifferent types of contracts with the ex post risk type of the borrower and other relevantvariables. We then design two incentive compatible contracts and analyze decisionsunder two different experimental treatments, one with moral hazard. Our empiricalresults confirm that borrowers of ex post lower risk choose contracts with highercollateral and lower interest rate. However, we find that moral hazard could reduceseparation. En este trabajo se examinan las tesis de Bester (1985, 1987) sobre el efecto clasificador de los contratos de préstamo que combinan los requisitos de garantía y tipo de interés. Para ello, empleamos dos métodos de análisis complementarios: un análisis empírico tradicional y un análisis experimental. En el primero, sobre una muestra de préstamos a Pymes de la Comunidad Valenciana, relacionamos dos tipos de contratos con el riesgo ex post del prestatario y otras variables relevantes del contrato y/o de la empresa. En el segundo, diseñamos dos contratos incentivo-compatibles y analizamos las elecciones de los individuos en dos entornos: con y sin riesgo moral. Nuestros resultados empíricos y experimentales confirman que los prestatarios de menor riesgo ex post se concentran en los contratos de mayor garantía y menor tipo de interés. Sin embargo, encontramos evidencia experimental de que la existencia de riesgo moral podría reducir la eficacia en la clasificación.Mercado de crédito, garantías, contratos incentivo-compatibles, información asimétrica, riesgo moral Credit markets, incentive compatible contracts, asymmetric information, moral hazard, experiments

Rational Herding in Reward-Based Crowdfunding: An MTurk Experiment.

Crowdfunding is gaining popularity as a way of financing social sustainable initiatives. We performed a controlled economic experiment in MTurk by simulating a crowdfunding platform and developed a theoretical model that rationalizes herding behavior. The experiment was designed to test and quantify the causal effects of revealing specific information to prospective backers: (i) the number of early contributors already financing the project and (ii) positive opinions of other backers versus those of experts. The results show that early contributions to the campaign and positive opinions of peers act as a reinforcing signal to potential backers and affect backers' beliefs about the probability of success, increasing contributions to the campaign. Furthermore, we show that herding is rational and set expectations on when we should observe rational herding and when not. The theoretical model captures the rational herding, which may be the main information aggregation path in reward-based crowdfunding platforms, and can help managers increase the likelihood of success in crowdfunding campaigns

The paradox of (Inter)net neutrality: An experiment on ex-ante antitrust regulation

Net neutrality has been the most relevant and heavily debated Internet regulation policy of the last decade. Net neutrality aims to prohibit discrimination between data packages in terms of content, origin, destination, or type of equipment used. However, the Big Tech companies, sheltered by the net neutrality policy, have flourished. They now have the power to exclude minor companies, and therefore their contents, from the Internet market in de facto defiance of the net neutrality principle. Academic results regarding this net neutrality paradox are still ambiguous. To represent the current Internet market distortions and analyze a potential tool to adjust and strengthen the net neutrality principle, an economic experiment based on an extended version of the dictator game was conducted. In particular, the effect of an ex-ante control and sanctioning mechanism on the collusive behavior of big companies was studied. The regulation mechanism proves effective, significatively reducing the abusive behavior of large Internet companies. This result contributes to the debate on net neutrality, reinforcing the idea that policymakers, given the current asymmetric Internet market structure, should revise and update net neutrality regulations