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Lemmings in the Crowd: Success and Failure of Crowdfunding Platforms

digital Lemmings in the Crowd: Success and Failure of Crowdfunding
Platforms
Article
journal RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI
issue RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2017 - 4
title Lemmings in the Crowd: Success and Failure of Crowdfunding Platforms
authors

publisher Vita e Pensiero
format Article | Pdf
online since 04-2018
doi 10.26350/000518_000001
issn 0035-676X (print) | 1827-7918 (digital)
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This paper investigates the determinants of success and failure of crowdfunding. We have drawn a random sample of 120 crowdfunding initiatives from the crowdfunding platforms Kickstarter and Indiegogo. We extracted relevant characteristics of the project and tracked their performance over a 30 day period. Using probit models, GLS estimators and dynamic panel methods, we estimated success probabilities. We found that crowdfunding is extremely persistent, and early success in attracting financing will improve the chance to get funded in the end. Presentation and instant gratification matters, as do moderate financial goals. We have not found any sectoral bias, which would be a direct indication of market inefficiencies. However, we observe a bias towards projects launched by all male project teams. There are no obvious explanations for this gap, so we must conclude that crowdfunding exhibits a gender bias.

keywords

Crowdfunding, Success, Kickstarter, Indiegogo, Dynamic Panel, Persistence, Gender Bias.