Experts in the crowd and their influence on herding in reward-based crowdfunding of cultural projects

We show that junior experts, i.e. future serial backers, follow senior experts, when specialized, which supports informational social influence

Aurélien Petit

2021

Scholarcy highlights

  • The present research investigates certification effects and rational herding in reward-based crowdfunding campaigns of cultural projects
  • To test hypothesis 1, concerning the certification effect of expert early birds on funding campaign success, we ran probit regressions examining the impact of the number of different types of backers among the early birds on campaign success, i.e. the attainment of the ultimate funding goal
  • This study focused on rational cascades and herding following expert contributions to reward-based crowdfunding campaigns of cultural projects
  • Results are in line with certain findings of previous research showing that informational cascades do play a significant role in campaign funding dynamics of the cultural industry as well
  • They are in line with previous research on various backer categories in crowdfunding where so-called “restricted investors”, who are pervasive in RCBF of cultural projects, feature funding behaviour strongly guided by the perceived norms and values of the emerging social network community
  • We demonstrate the importance of experts in the following ways: we first examined a static certification effect achieved by early expert contributions, we decomposed the crowd of followers and focus on other experts and apprentice serial backers and looked at experts’ impact on day-by-day funding dynamics over the whole campaign to capture possible cascades
  • As a matter of fact, our findings are derived from an original empirical set-up revealing the importance of specific subcategories of the restricted-investor crowd typical for cultural reward-based crowdfunding as defined by their respective funding experience

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