This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Review
  4. Forthcoming Articles
  5. Aiming for the Goal: Contribution Dynamics of Crowdfunding

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Aiming for the Goal: Contribution Dynamics of Crowdfunding

  • Joyee Deb
  • Aniko Öry
  • Kevin R. Williams
American Economic Review (Forthcoming)

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.

Downloads