Sharing Economy, Platforms, and Crowds
Loading...
Paper Number
2659
Paper Type
Completed
Description
Reward-based crowdfunding platforms are increasingly incorporating donation options, allowing backers to financially support campaigns without receiving any tangible rewards in return. Although this option seems to create a novel fundraising channel, our quasi-natural experimental study highlights the potential negative impacts of individual donation occurrences, which ultimately lead to reduced total raised funds, as substantiated by robust empirical evidence. We explore two primary mechanisms responsible for the adverse effect. First, the bystander effect, where prior donations discourage potential backers from supporting the campaign, causing them to either forgo reward purchases or decrease their contribution amounts. Second, the social conformity effect, in which prior donations shape backers' perceptions of social norms and consequently lower their support levels. By offering a comprehensive understanding of behavioral dynamics in crowdfunding, our study enriches the literature on the design and management of crowdfunding platforms and provides valuable insights for industry practitioners.
Recommended Citation
Deng, Yipu; Zheng, Jinyang; Li, Guoxin; and Kannan, Karthik, "When Reward Meets Donation: A Paradoxical Dilemma" (2023). ICIS 2023 Proceedings. 9.
https://aisel.aisnet.org/icis2023/sharing_econ/sharing_econ/9
When Reward Meets Donation: A Paradoxical Dilemma
Reward-based crowdfunding platforms are increasingly incorporating donation options, allowing backers to financially support campaigns without receiving any tangible rewards in return. Although this option seems to create a novel fundraising channel, our quasi-natural experimental study highlights the potential negative impacts of individual donation occurrences, which ultimately lead to reduced total raised funds, as substantiated by robust empirical evidence. We explore two primary mechanisms responsible for the adverse effect. First, the bystander effect, where prior donations discourage potential backers from supporting the campaign, causing them to either forgo reward purchases or decrease their contribution amounts. Second, the social conformity effect, in which prior donations shape backers' perceptions of social norms and consequently lower their support levels. By offering a comprehensive understanding of behavioral dynamics in crowdfunding, our study enriches the literature on the design and management of crowdfunding platforms and provides valuable insights for industry practitioners.
When commenting on articles, please be friendly, welcoming, respectful and abide by the AIS eLibrary Discussion Thread Code of Conduct posted here.
Comments
08-Sharing