Summary:
In China, reward-based crowdfunding on the Internet is developing fast and was valued at 18.8 billion RMB in 2017. However, academic research on reward-based crowdfunding focuses mainly on static cross-sectional data, including the factors that affect the success of crowdfunding, the role of geographical distance, social capital and social networks in crowdfunding, etc. A few scholars undertake dynamic research, such as Burtch et al. (2012) and Kuppuswamy and Bayus (2013, 2015), who study the changes and reasons for support in reward-based crowdfunding over time. Overall, however, dynamic research is still in its infancy. This paper focuses on reward-based crowdfunding in China, learns from Kuppuswamy and Bayus (2013, 2015), and draws on the theories of social responsibility diffusion and the target gradient effect to explore the dynamic impact of decisions by other supporters (real-time social information) on the decision-making of potential supporters. We systematically collect real-time big data in the process of crowdfunding and explore the impact of real-time social information.We use Web crawler software for big data, Octopus collection software, to collect real-time information at a fixed time every day on the three reward-based crowdfunding platforms in China—Jingdong, Taobao, and Zhongchou —for around 130 days from October 2015 to February 2016. Then we use data mining and collation to build up a database to record such data as the amount of support and number of people in each crowdfunding project, including both the new additions every day and the total, the number of people focusing on the project, whether the project is promoted on the website homepage, whether the project has reached its crowdfunding target, the total number of crowdfunding projects in process on the website, and the support for the most popular project on the website. Based on a total sample of 3,949 reward-based crowdfunding projects, we find that real-time social information, measured as the total amount of support and people, has a dynamic impact on the decisions of potential supporters. First, social responsibility diffusion plays an important role in reward-based crowdfunding. At the beginning, when potential supporters find that others have provided enough help and they believe the remaining amount required will be met by others, the social responsibility or compassion of potential supporters will either diminish or spread. Therefore, the regression coefficient of the amount of support added daily and the cumulative support reflecting the real-time social information is significantly positive but shows a significant downward trend over time. At the end, under the “all or nothing” rule of crowdfunding, the social responsibility and compassion of potential supporters recovers and the regression coefficient returns to a significant positive and rising trend toward the cut-off date. However, in China we find that the diffusion effect of social responsibility is stronger in the initial stage, and, although the waning effect is relatively weak at the end, it is much more obvious in projects that have not yet reached the target level near the deadline.Nevertheless, the target gradient effect cannot be ignored in reward-based crowdfunding. The supportive decisions of others positively affect peoples judgments about the value of the shared goal, and there is thus significant acceleration in support as the crowdfunding project approaches its financing objective. This paper supports the results of Kuppuswamy and Bayus (2013, 2015) on Kickstarter. However, they use dummy variables or the absolute amount of support to examine the absolute time effect. Based on dynamic panel data, this paper uses the percentage of support and the number added every day as the dependent variable, and examines the effect under real-time information (the cumulative amount of support). We also find that the weakening effect is much more obvious in projects that have not yet reached the target level near the deadline. Our result is more persuasive. Our findings provide a reference for initiators of reward-based crowdfunding. They should pay close attention to the diffusion of social responsibility in the initial stage of the competition. During the middle stage, initiators should secure more than half of the required financing as fast as possible. In the end stage of crowdfunding, the sponsor should be concerned to reawaken the sense of responsibility or compassion among potential supporters to achieve the financing target.
顾乃康, 赵坤霞. 实时的社会信息与互联网产品众筹的动态性 ——基于大数据的采集与挖掘研究[J]. 金融研究, 2019, 463(1): 168-187.
GU Naikang, ZHAO Kunxia. Real-time Social Information and Dynamics of Reward-based Internet Crowdfunding: Based on Big Data. Journal of Financial Research, 2019, 463(1): 168-187.
Alexandra Moritz, and J. H. Block, 2016, “Crowdfunding: A Literature Review and Research Directions”, Crowdfunding in Europe, 11645-11649.
[5]
Aitamurto, T., 2011, “The Impact of Crowdfunding for Journalism”, Journalism Practise, 5(4),429–445.
[6]
Belleflamme, Paul, N. Omrani, and M. Peitz., 2015, “The Economics of Crowdfunding Platforms”, Information Economics and Policy, 33, 11-28.
[7]
Burtch, G., A. Ghose, and S. Wattal, 2012, “An Empirical Examination of the Antecedents and Consequences of Investment Patterns in Crowd-Funded Markets”, SSRN Working Paper.
[8]
Cryder, et al., 2013. “The Donor is in the Details”. Organizational Behavior & Human Decision Processes 120.1:15-23.
[9]
Fishbach, A., M. Henderson and M. Koo., 2011. “Pursuing Goals with Others: Group Identification and Motivation Resulting From Things Done Versus Things Left Undone”, Journal of Experimental Psychology, General, 140(3), 520-534.
[10]
Frydrych, Denis, 2014, “Exploring Entrepreneurial Legitimacy in Reward-based Crowdfunding”, Venture Capital 16.3:247-269.
[11]
Gerber, E., Hui, J., and Kuo, P., 2012. “Crowdfunding: Why People are Motivated to Post and Fund Projects on Crowdfunding Platforms”, CSCW Workshop.
[12]
Kuppuswamy V, Bayus B L., 2013, “Crowdfunding Creative Ideas: The Dynamics of Project Backers in Kickstarter”, SSRN Working Paper.
[13]
Kuppuswamy V, Bayus B L., 2015, “Crowdfunding Creative Ideas: The Dynamics of Project Backers in Kickstarter”, Social Science Electronic Publishing.
[14]
Latane B. and Darley, J., 1970. “The Unresponsive Bystander: Why doesn’t he Help? ”, New York, NY: Meredith Corporation.
[15]
Lu, C. T., Xie, S., Kong, X., and Yu, P. S., 2014, “Inferring the Impacts of Social Media on Crowdfunding”, ACM International Conference on Web Search and Data Mining, pp.573-582.
[16]
Mollick E., 2014, “The Dynamics of Crowdfunding: An Exploratory Study”,Journal of Business Venturing, 29(1):1-16.
[17]
Pierrakis, Y., and Collins, L., 2013, “Crowdfunding: A New Innovative model of Providing Funding to Projects and Businesses”, SSRN Working Paper.
[18]
Schwienbacher, Armin, and B. Larralde, 2010, “Crowdfunding of Small Entrepreneurial Ventures”, SSRN Working Paper.
[19]
Voelpel, Sven C., R. A. Eckhoff, and J. F rster.,2008, “David Against Goliath? Group Size and Bystander Effects in Virtual Knowledge Sharing”, Human Relations 61.2:271-295.
[20]
Zhang, J. and P. Liu, 2012, “Rational Herding in Microloan Markets,” Management Science, 58(5), 892-912.
