In the existing literature on crowdfunding project performance, previous studies have given little attention to the impact of investors’ hedonic value and utilitarian value on project results. In a crowdfunding setting, utilitarian value is somehow hard to satisfy due to information asymmetry and adverse selection problem. Therefore, the projects with more hedonic value can be more attractive for potential investors. Lucky draw is a method to increase consumer hedonic value, and it can influence investors’ behavior as a result. The authors hypothesize that projects with hedonic treatment (lucky draw) may have higher probability to win their campaign than others. The paper aims to discuss these issues.
A unique self-extracted two-year Chinese crowdfunding platform real data set has been applied as the analysis sample. The authors first employ propensity score matching methods to control for the endogeneity of hedonic treatment adoption (lucky draw). The authors then run OLS regression and probit regression in order to test the hypotheses.
The analysis suggests a significant positive relationship not only between project lottery adoption and project results but also between project lottery adoption and project popularity.
The results suggest that an often ignored factor – hedonic treatment (lucky draw) – can play an important role in crowdfunding project performance.
Zhao, L. and Vinig, T. (2017), "Hedonic value and crowdfunding project performance: a propensity score matching-based analysis", Review of Behavioral Finance, Vol. 9 No. 2, pp. 169-186. https://doi.org/10.1108/RBF-09-2016-0059Download as .RIS
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