Document Type
Discussion Paper
Publication Date
1-2024
CFDP Number
2149R3
CFDP Pages
106
Journal of Economic Literature (JEL) Code(s)
C73, L26, M13
Abstract
We study a dynamic contribution game where investors seek private benefits that are offered in exchange for contributions and a single, publicly-minded donor values project success. We show that donor contributions serve as costly signals that encour-age socially-productive contributions by investors who face a coordination problem. Investors and the donor prefer different equilibria but all benefit in expectation from the donor’s ability to dynamically signal his valuation. We explore various contexts in which our model can be applied and delve empirically into the case of Kickstarter. We calibrate our model and quantify the coordination benefits of dynamic signaling in counterfactuals.
Recommended Citation
Deb, Joyee; Öry (Oery), Aniko; and Williams, Kevin R., "Aiming for the Goal: Contribution Dynamics of Crowdfunding" (2024). Cowles Foundation Discussion Papers. 2779.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2779