Start Date

10-12-2017 12:00 AM

Description

As crowdfunding platforms are increasingly linked to third-party social media platforms, questions arise as to whether project initiators can leverage their online friendships as sources of funding for their crowdfunding campaigns and, if so, how and through what mechanisms online friendships affect individual funding decisions. Taking a relational view, we examine the effects of tie strength and embeddedness on funding decisions. Our analysis of social media-mediated ties and crowdfunding campaigns suggests that both tie strength and embeddedness increase funding likelihood but through different mechanisms. Tie strength provides potential backers with access to personal information about the project initiator (information transfer mechanism), which is leveraged for self-interest-driven economic consideration, whereas embeddedness affects funding decisions by making potential backers feel socially obligated to help the project initiator (social obligation mechanism). As a result of these different mechanisms, tie strength and embeddedness mitigate different types of crowdfunding uncertainty that discourage funding.

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Dec 10th, 12:00 AM

Mobilizing Online Social Capital: The Relational View of Crowdfunding

As crowdfunding platforms are increasingly linked to third-party social media platforms, questions arise as to whether project initiators can leverage their online friendships as sources of funding for their crowdfunding campaigns and, if so, how and through what mechanisms online friendships affect individual funding decisions. Taking a relational view, we examine the effects of tie strength and embeddedness on funding decisions. Our analysis of social media-mediated ties and crowdfunding campaigns suggests that both tie strength and embeddedness increase funding likelihood but through different mechanisms. Tie strength provides potential backers with access to personal information about the project initiator (information transfer mechanism), which is leveraged for self-interest-driven economic consideration, whereas embeddedness affects funding decisions by making potential backers feel socially obligated to help the project initiator (social obligation mechanism). As a result of these different mechanisms, tie strength and embeddedness mitigate different types of crowdfunding uncertainty that discourage funding.