Mind the Gap: Crowd-Funding and the Role of Seed Money

Arbeitspapier

We analyze voluntary private contributions to public goods and the role seed money plays in signaling the public good's quality to potential subsequent contributors. We present a theoretical model and analyze two sets of naturally occurring data from crowd-funding platforms. After developing the theoretical background we find statistically significant switch points which distinguish between seed contributions to subsequent contributions. A positive change in contribution behavior after the switch suggests an increase in the perceived value of the public good. We find that the signal comprises the number of contributors and the average contribution (as proportion of targeted goal).

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 8955

Classification and Topics

• Classification: Wirtschaft ; Publicly Provided Private Goods
• Subject: public goods ; voluntary private provision ; crowd-funding platform ; seed money

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Deutsch, Joseph ; Epstein, Gil S. ; Nir, Alon
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/110184
• Last update: 10.03.2025, 11:42 AM CET