Lemmings in the Crowd: Success and Failure of Crowdfunding Platforms

digital

Article

Magazine

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI

Fascicle

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2017 - 4

Title

Lemmings in the Crowd: Success and Failure of Crowdfunding Platforms

Authors

Eliana Baici, Laura Capraro, Martin Zagler

Publisher

Vita e Pensiero

Format

Article |

Pdf

Online from

04-2018

Doi

10.26350/000518_000001

Issn

0035-676X (print) | 1827-7918 (digital)

€ 6.00

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Description

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.