Yale School of Management
165 Whitney Ave
New Haven, CT 06520
Institutional Affiliation: New York University
NBER Working Papers and Publications
|May 2019||Aiming for the Goal: Contribution Dynamics of Crowdfunding|
with , : w25881
We study reward-based crowdfunding campaigns, a new class of dynamic contribution games where consumption is exclusive. Two types of backers participate: buyers want to consume the product while donors just want the campaign to succeed. The key tension is one of coordination between buyers, instead of free-riding. Donors can alleviate this coordination risk. We analyze a dynamic model of crowdfunding and demonstrate that its predictions are consistent with high-frequency data collected from Kickstarter. We compare the Kickstarter mechanism to alternative platform designs and evaluate the value of dynamically arriving information. We extend the model to incorporate social learning about quality.