Opaque selling has been widely adopted by service providers in the travel industry to sell off leftover capacity under stochastic demand. We consider a two-stage model to study the impact of different selling mechanisms, posted price (PP) versus name-your-own-price (NYOP), of an opaque reseller on competing service providers who face forward-looking customers. We find that in this environment, providers prefer that the opaque reseller uses a posted price instead of a bidding model. This is because the ability to set retail prices is critical for extracting surplus from customers who wait to purchase from the reseller. Such surplus extraction enables providers to set high prices for advance sales and obtain high profits. The dominance of PP over NYOP disappears, however, when competition between sellers is minimal or absent. We extend our model to multiple opaque resellers who compete in selling off last-minute capacity for service providers and find that our main insights continue to hold with differentiated resellers. Despite providers' preference in favor of PP, there are circumstances under which the opaque reseller earns higher profits under NYOP. Leisure customers might also prefer the bidding mechanism, which allows them to retain some surplus. This can help explain the rapid growth of the NYOP model over the last decade. Our findings are consistent with the evolution of opaque selling in the travel industry, and in particular, the recent trend towards more published price sales for opaque products.

We consider an entrepreneur who designs a reward-based crowdfunding campaign when the campaign provides a signal about the future demand for the product and subsequent venture capital is needed. We find that both the informativeness of the campaign and considerations related to gaining access to venture capital funding affect the entrepreneur’s choice of campaign instruments, as well as her decision of whether to run a campaign. In particular, entrepreneurs should launch the campaign either when it is highly informative or when it is not informative at all. For relatively low levels of informativeness, but not so low that the venture capitalist (VC) completely ignores the campaign outcome in his funding decision, our study suggests that the entrepreneur might forgo the opportunity of acquiring information via crowdfunding because the benefits of crowdfunding are insufficient to offset the risk of campaign failure. We also find that the preference of entrepreneurs in favor of crowdfunding is stronger than that of VCs. For backers, we point out that in addition to the risk inherent in new product development, they should be cognizant of the risk that successful campaigns do not guarantee subsequent VC funding. As the use of crowdfunding platforms becomes more prevalent for entrepreneurial projects, our study offers a deeper understanding of the dual role of reward-based crowdfunding in terms of acquiring demand information and raising capital for early-stage start-ups. The online appendix is available at https://doi.org/10.1287/isre.2018.0777 .