From Visitors to Donors: How and Why Funding Rates Vary over Time in All-or-Nothing Noninvestment Crowdfunding Projects

The number of donations to all-or-nothing noninvestment crowdfunding campaigns follows a U-shape. Increased promotional efforts at the beginning and the end of the campaign period raise the number of visits to the project webpage, which in turn increases funding. However, whether there is any variation across the duration of the campaign in the likelihood of a potential donor already on the project webpage actually contributing to the project is an open question. This article demonstrates that, unlike the number of donations, the funding rate (i.e., the ratio of number of donations to number of visits) increases monotonically throughout the funding period. Webpage visitors prefer to fund projects later in the campaign period because that is when they perceive their contribution will be most useful. Analyses of the association between circumstantial information displayed on the project webpage and the funding rate provide evidence consistent with the proposed rationale. A follow-up experiment corroborates the mediating role of perceived usefulness.