Competitive crowdfunding under asymmetric quality information

We proposed a framework on how to design the optimal crowdfunding strategy for the competitive creators under quality information asymmetry. And we also considered the platform uses different funding mechanisms (fixed or flexible) and the creators’ different orders of initiation (lead or follow). We find that when high-quality creator initiates first and the degree of quality information asymmetry is low, the optimal price of low-quality creator is negatively correlated with the quality utility and success rate of his own product, but positively correlated with the quality utility and success rate of his competitor’s product. More interestingly, we also show that it is more conducive to maximize the profits of creators to retain quality information asymmetry when high-quality creator initiates crowdfunding first. We also find that when the degree of quality information asymmetry between creators and contributors is high, it is always better that the high-quality creator initiates crowdfunding first, whereas it is better for the low-quality creator to initiate first if the of degree of quality information asymmetry between creators and contributors is low. Finally, when the degree of quality information asymmetry between creators and contributors is very high or very low, the two creators and the platform can obtain higher profits by a fixed mechanism; otherwise, the flexible mechanism is more beneficial to them.