The Economics of Crowdfunding

摘要

This paper models crowdfunding as an entrepreneur posting a price to partially informed backers. The backers' incentive to contribute to the campaign is driven by the expectation of paying a lower price than the retail price. Fixed funding reinforces this incentive by refunding the money when the value of the good is low, and therefore it has a higher chance of getting funded and also raises more funds. Our model thus explains the success of crowdfunding and in particular the popularity of fixed funding. Measures to deregulate the equity crowdfunding market, such as the JOBS act, thus seem to be a right step.