Is kindness the magical spell? The role of information and reciprocity in revenue-sharing crowdfunding
Behrooz Pourghannad1, Guangwen Kong2, Laurens Debo3
1University of Oregon; 2Fox School of Business, Temple University; 3Tuck School of Business, Dartmouth College
Problem: Crowdfunding with insiders and outsiders faces reciprocity and information asymmetry. Methodology/Results: High reciprocity hampers information transmission, benefiting outsiders. Information asymmetry lets outsiders gain a larger share. Increased reciprocity reduces investor payoff. Managerial Implications: Limiting investors or investment improves information transmission. Leverage social networks for better crowdfunding.