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The effect of information asymmetries on serial crowdfunding and campaign success

Author

Listed:
  • Vincenzo Butticè

    (Economics and Industrial Engineering)

  • Carlotta Orsenigo

    (Economics and Industrial Engineering)

  • Mike Wright

    (South Kensington Campus
    University of Ghent)

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.

Suggested Citation

  • Vincenzo Butticè & Carlotta Orsenigo & Mike Wright, 2018. "The effect of information asymmetries on serial crowdfunding and campaign success," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(2), pages 143-173, June.
    • Handle: RePEc:spr:epolin:v:45:y:2018:i:2:d:10.1007_s40812-017-0074-9
    DOI: 10.1007/s40812-017-0074-9
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    Cited by:

    1. Butticè, Vincenzo & Colombo, Massimo G. & Fumagalli, Elena & Orsenigo, Carlotta, 2019. "Green oriented crowdfunding campaigns: Their characteristics and diffusion in different institutional settings," Technological Forecasting and Social Change, Elsevier, vol. 141(C), pages 85-97.
    2. Sewaid, Ahmed & Parker, Simon C. & Kaakeh, Abdulkader, 2021. "Explaining serial crowdfunders' dynamic fundraising performance," Journal of Business Venturing, Elsevier, vol. 36(4).
    3. Sewaid, Ahmed & Garcia-Cestona, Miguel & Silaghi, Florina, 2021. "Resolving information asymmetries in financing new product development: The case of reward-based crowdfunding," Research Policy, Elsevier, vol. 50(10).

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    More about this item

    Keywords

    Crowdfunding; Serial crowdfunding; Information asymmetries; Online community; Success;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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