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The effect of information asymmetries on serial crowdfunding and campaign success

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Abstract

In this paper, we study how information asymmetries influence the relation between serial crowdfunding and campaign success. We argue that the main advantage of serial crowdfunders is related to the role of information asymmetry reduction of the community they had developed through previous campaigns. Therefore, serial crowdfunders experience higher advantages compared to novice crowdfunders for campaigns characterized by high information asymmetries while their advantages tend to disappear for other campaigns. Similarly, we show that when information asymmetries are particularly high, the advantages of serial crowdfunders are endurable over time, while when information asymmetries are lower they tend to disappear rapidly. Econometric results on a sample of 34217 Kickstarter projects confirm our contentions. These finding are confirmed when using machine learning techniques instead of classical econometric analysis. Implications for research, practice and policy are discussed.

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Notes

  1. Several papers in the management literature provide support in other context to the idea that communities help to reduce information (see e.g. Stam and Elfring 2008; Wu 2008).

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Authors and Affiliations

  1. Politecnico di Milano, Department of Management, Economics and Industrial Engineering, Piazza Leonardo da Vinci, 32, 20133, Milan, Italy

    Vincenzo Butticè & Carlotta Orsenigo

  2. Imperial College Business School, South Kensington Campus, London, SW7 2AZ, UK

    Mike Wright

  3. University of Ghent, Ghent, Belgium

    Mike Wright

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  1. Vincenzo Butticè
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  2. Carlotta Orsenigo
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Correspondence to Vincenzo Butticè.

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Butticè, V., Orsenigo, C. & Wright, M. The effect of information asymmetries on serial crowdfunding and campaign success. Econ Polit Ind 45, 143–173 (2018). https://doi.org/10.1007/s40812-017-0074-9

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  • DOI: https://doi.org/10.1007/s40812-017-0074-9

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