Paccar Hall, Room 290
Seminar Speaker: Robert Swinney
Affiliation: Duke University
Area: Operations Management
Name of Presentation: Designing Rewards-Based Crowdfunding Campaigns: Signaling Quality and Mitigating Strategic Waiting
Rewards-based crowdfunding is a type of online-based fundraising in which entrepreneurs solicit donations in support of a project from a large number of individuals. If the total funds raised exceed a pre-determined success target, the entrepreneur provides contributors with a reward. A typical project might be the design and production of a new or innovative physical product, and the reward for contributors upon successful funding of the project might be a unit of the finished good. In this talk, I will discuss two related papers that analyze key challenges in rewards-based crowdfunding: information asymmetry regarding the quality of the reward, and strategic contribution delays. The former refers to the fact that entrepreneurs typically have better information about the quality of the reward than individual contributors. The latter refers to tendency of individual contributors to strategically delay their participation in a project until better information regarding the likelihood of success is available. I will discuss how an entrepreneur can adjust the design of her crowdfunding campaign to help mitigate both issues.