Document Type
Discussion Paper
Publication Date
12-1-2018
CFDP Number
2149R
CFDP Revision Date
January 31, 2021
CFDP Pages
105
Journal of Economic Literature (JEL) Code(s)
C73, L26, M13
Abstract
We study reward-based crowdfunding, a new class of dynamic contribution games where a private good is produced only if the funding goal is reached by a deadline. Buyers face a problem of coordination rather than free-riding. A long-lived donor may alleviate this coordination risk, signaling his wealth through dynamic contributions. We characterize platform-, donor-, and buyer-optimal equilibrium outcomes, attained by Markov equilibria with simple donation strategies. We test the model’s predictions using high-frequency data collected from the largest crowdfunding platform, Kickstarter. The model fits the data well, especially for predictions concerning comparative statistics, donation dynamics, and properties of successful campaigns.
Recommended Citation
Deb, Joyee; Öry (Oery), Aniko; and Williams, Kevin R., "Aiming for the Goal: Contribution Dynamics of Crowdfunding" (2018). Cowles Foundation Discussion Papers. 2597.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2597