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Online crowd-funding strategy: a game-theoretical approach to a Kickstarter case study

Author

Listed:
  • Nafisa Mahbub

    (State University of New York at Buffalo)

  • Anh Le

    (State University of New York at Buffalo)

  • Jun Zhuang

    (State University of New York at Buffalo)

Abstract

There are many factors that can inhibit the potential of promising projects from being completely funded in crowd-funding campaigns. In order to study this, a game-theoretical model is constructed to display irrational fear and help creators maximize their chances of facilitating a successful campaign. This research shows that once irrational fear is modeled along with the strategies associated with the design of the reward system, the total pledged amount for a project can be predicted in order to scheme their strategies based on the situation. For simplicity and consistency, the model is based on Kickstarter funding campaigns of physical products that are used as rewards for support. This paper discusses the influence of potential strategies for increasing the total pledge, such as modeling irrational fear and limiting rewards.

Suggested Citation

  • Nafisa Mahbub & Anh Le & Jun Zhuang, 2022. "Online crowd-funding strategy: a game-theoretical approach to a Kickstarter case study," Annals of Operations Research, Springer, vol. 315(2), pages 1019-1036, August.
    • Handle: RePEc:spr:annopr:v:315:y:2022:i:2:d:10.1007_s10479-020-03857-5
    DOI: 10.1007/s10479-020-03857-5
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