American Economic Review Vol. 114 No. 12 2024
Aiming for the Goal: Contribution Dynamics of Crowdfunding
Abstract
We study a dynamic contribution game where investors seek private benefits offered in exchange for contributions, and a single, publicly minded donor values project success. We show that donor contributions serve as costly signals that encourage 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.
- DOI
- 10.1257/aer.20181851
- Volume
- 114
- Issue
- 12
- Pages
- 3847-3876
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref