Scarcity Strategy in Crowdfunding: An Empirical Exploration of Reward Limits

Published Online:https://doi.org/10.1287/isre.2020.0934

References

  • Aguirre-Rodriguez A (2013) The effect of consumer persuasion knowledge on scarcity appeal persuasiveness. J. Advertising 42(4):371–379.CrossrefGoogle Scholar
  • Allison TH, Davis BC, Webb JW, Short JC (2017) Persuasion in crowdfunding: An elaboration likelihood model of crowdfunding performance. J. Bus. Venturing 32(6):707–725.CrossrefGoogle Scholar
  • Amaldoss W, Jain S (2005) Pricing of conspicuous goods: A competitive analysis of social effects. J. Marketing Res. 42(1):30–42.CrossrefGoogle Scholar
  • Amaldoss W, Jain S (2008) Research note-trading up: A strategic analysis of reference group effects. Marketing Sci. 27(5):932–942.LinkGoogle Scholar
  • Amaldoss W, Jain S (2010) Reference groups and product line decisions: An experimental investigation of limited editions and product proliferation. Management Sci. 56(4):621–644.LinkGoogle Scholar
  • Anderson ET, Simester DI (2008) Does demand fall when customers perceive that prices are unfair? The case of premium pricing for large sizes. Marketing Sci. 27(3):492–500.LinkGoogle Scholar
  • Arellano M, Bover O (1995) Another look at the instrumental variable estimation of error-components models. J. Econometrics 68(1):29–51.CrossrefGoogle Scholar
  • Balachander S, Stock A (2009) Limited edition products: When and when not to offer them. Marketing Sci. 28(2):336–355.LinkGoogle Scholar
  • Balachander S, Liu Y, Stock A (2009) An empirical analysis of scarcity strategies in the automobile industry. Management Sci. 55(10):1623–1637.LinkGoogle Scholar
  • Belleflamme P, Lambert T, Schwienbacher A (2014) Crowdfunding: Tapping the right crowd. J. Bus. Venturing 29(5):585–609.CrossrefGoogle Scholar
  • Biswas A, Blair EA (1991) Contextual effects of reference prices in retail advertisements. J. Marketing 55(3):1–12.CrossrefGoogle Scholar
  • Biswas A, Bhowmick S, Guha A, Grewal D (2013) Consumer evaluations of sale prices: Role of the subtraction principle. J. Marketing 77(4):49–66.CrossrefGoogle Scholar
  • Blundell R, Bond S (1998) Initial conditions and moment restrictions in dynamic panel data models. J. Econometrics 87(1):115–143.CrossrefGoogle Scholar
  • Boehmke FJ, Morey DS, Shannon M (2006) Selection bias and continuous-time duration models: Consequences and a proposed solution. Amer. J. Political Sci. 50(1):192–207.CrossrefGoogle Scholar
  • Brock TC (1968). Implications of commodity theory for value change. Greenwald AG, Brock TC, Ostrom TM, eds. Psychological Foundations of Attitudes (Academic Press, New York), 243−275.CrossrefGoogle Scholar
  • Brock TC, Mazzocco PJ (2004) Responses to Scarcity: A Commodity Theory Perspective on Reactance and Rumination (Lawrence Erlbaum, Mahwah, NJ).Google Scholar
  • Brown S (2001) Torment your customers (they’ll love it). Harvard Bus. Rev. 79(9):82–88.Google Scholar
  • Burtch G, Ghose A, Wattal S (2013) An empirical examination of the antecedents and consequences of contribution patterns in crowd-funded markets. Inform. Systems Res. 24(3):499–519.LinkGoogle Scholar
  • Burtch G, Ghose A, Wattal S (2015) The hidden cost of accommodating crowdfunder privacy preferences: A randomized field experiment. Management Sci. 61(5):949–962.LinkGoogle Scholar
  • Caliendo M, Kopeinig S (2008) Some practical guidance for the implementation of propensity score matching. J. Econom. Surveys 22(1):31–72.CrossrefGoogle Scholar
  • Certo ST, Busenbark JR, Woo Hs, Semadeni M (2016) Sample selection bias and Heckman models in strategic management research. Strategic Management J. 37(13):2639–2657.CrossrefGoogle Scholar
  • Chan C, Parhankangas A (2017) Crowdfunding innovative ideas: How incremental and radical innovativeness influence funding outcomes. Entrepreneurship Theory Practice 41(2):237–263.CrossrefGoogle Scholar
  • Cialdini RB (2009) Influence: Science and Practice, 5th ed. (Pearson, Boston).Google Scholar
  • Courty P, Nasiry J (2016) Product launches and buying frenzies: A dynamic perspective. Production Oper. Management 25(1):143–152.CrossrefGoogle Scholar
  • Drover W, Wood MS, Zacharakis A (2017) Attributes of angel and crowdfunded investments as determinants of VC screening decisions. Entrepreneurship Theory Practice 41(3):323–347.CrossrefGoogle Scholar
  • Fryer RG (2011) Financial incentives and student achievement: Evidence from randomized trials. Quart. J. Econom. 126(4):1755–1798.CrossrefGoogle Scholar
  • Gneezy U, Meier S, Rey-Biel P (2011) When and why incentives (don’t) work to modify behavior. J. Econom. Perspect. 25(4):191–210.CrossrefGoogle Scholar
  • Griskevicius V, Goldstein NJ, Mortensen CR, Sundie JM, Cialdini RB, Kenrick DT (2009) Fear and loving in Las Vegas: Evolution, emotion, and persuasion. J. Marketing Res. 46(3):384–395.CrossrefGoogle Scholar
  • Guardabascio B, Ventura M (2014) Estimating the dose–response function through a generalized linear model approach. Stata J. 14(1):141–158.CrossrefGoogle Scholar
  • Heckman JJ (1979) Sample selection bias as a specification error. Econometrica 47(1):153–161.CrossrefGoogle Scholar
  • Heckman JJ, Ichimura H, Todd P (1998) Matching as an econometric evaluation estimator. Rev. Econom. Stud. 65(2):261–294.CrossrefGoogle Scholar
  • Helsen K, Schmittlein DC (1993) Analyzing duration times in marketing: Evidence for the effectiveness of hazard rate models. Marketing Sci. 12(4):395–414.LinkGoogle Scholar
  • Hirano K, Imbens GW (2004) The propensity score with continuous treatments. Gelman A, Meng XL, eds. Applied Bayesian Modeling and Causal Inference from Incomplete‐Data Perspectives (Wiley InterScience, West Sussex, UK).CrossrefGoogle Scholar
  • Hong Y, Hu Y, Burtch G (2018) Embeddedness, pro-sociality, and social influence: Evidence from online crowdfunding. MIS Quart. 42(4):1211–1224.CrossrefGoogle Scholar
  • Hu M, Li X, Shi M (2015) Product and pricing decisions in crowdfunding. Marketing Sci. 34(3):331–345.LinkGoogle Scholar
  • Imai K, van Dyk DA (2004) Causal inference with general treatment regimes: Generalizing the propensity score. J. Amer. Statist. Assoc. 99(467):854–866.CrossrefGoogle Scholar
  • Jang WE, Ko YJ, Morris JD, Chang Y (2015) Scarcity message effects on consumption behavior: Limited edition product considerations. Psych. Marketing 32(10):989–1001.CrossrefGoogle Scholar
  • Kim HM, Kramer T (2006) Pay 80%” vs. “get 20% off”: The effect of novel discount presentation on consumers’ deal perceptions. Marketing Lett. 17(4):311–321.CrossrefGoogle Scholar
  • Kuppuswamy V, Bayus BL (2017) Does my contribution to your crowdfunding project matter? J. Bus. Venturing 32(1):72–89.CrossrefGoogle Scholar
  • Lewbel A (2012) Using heteroscedasticity to identify and estimate mismeasured and endogenous regressor models. J. Bus. Econom. Statist. 30(1):67–80.CrossrefGoogle Scholar
  • Li Z, Jarvenpaa SL (2016) Dynamic goal setting, community feedback, and project performance: Evidence from online crowdfunding. Working paper, Harvard Business School, Boston, MA.Google Scholar
  • Lin Y, Boh WF, Goh KH (2014) How different are crowdfunders? Examining archetypes of crowdfunders and their choice of projects. Working paper, http://ssrn.com/abstract=2397571.Google Scholar
  • Locke EA, Latham GP (2002) Building a practically useful theory of goal setting and task motivation: A 35-year odyssey. Amer. Psychologist 57(9):705–717.CrossrefGoogle Scholar
  • Mollick E (2014) The dynamics of crowdfunding: Determinants of success and failure. J. Bus. Venturing 29(1):1–16.CrossrefGoogle Scholar
  • Mollick E, Nanda R (2016) Wisdom or madness? Comparing crowds with expert evaluation in funding the arts. Management Sci. 62(6):1533–1553.LinkGoogle Scholar
  • Mussweiler T, Rüter K, Epstude K (2004) The ups and downs of social comparison: Mechanisms of assimilation and contrast. J. Personality Soc. Psych. 87(6):832–844.CrossrefGoogle Scholar
  • Oruc R (2015) The effects of product scarcity on consumer behavior: A meta-analysis. Unpublished PhD dissertation, European University Viadrina, Frankfurt (Oder), Germany.Google Scholar
  • Parhankangas A, Renko M (2017) Linguistic style and crowdfunding success among social and commercial entrepreneurs. J. Bus. Venturing 32(2):215–236.CrossrefGoogle Scholar
  • Pesce NL (2017) 10 Kickstarter products that raised the most money. MarketWatch (June 22), https://moneyish.com/ish/10-kickstarter-products-that-raised-the-most-money/.Google Scholar
  • Rigby DK, Gruver K, Allen J (2009) Innovation in turbulent times. Harvard Bus. Rev. 87(6):79–86.Google Scholar
  • Rosenbaum PR, Rubin DB (1983) The central role of the propensity score in observational studies for causal effects. Biometrika 70(1):41–55.CrossrefGoogle Scholar
  • Ross L, Bierbrauer G, Hoffman S (1976) The role of attribution processes in conformity and dissent: Revisiting the Asch situation. Amer. Psychologist 31(2):148–157.CrossrefGoogle Scholar
  • Rubin DB (2005) Causal inference using potential outcomes: Design, modeling, decisions. J. Amer. Statist. Assoc. 100(469):322–331.CrossrefGoogle Scholar
  • Rubin DB, Thomas N (2000) Combining propensity score matching with additional adjustments for prognostic covariates. J. Amer. Statist. Assoc. 95(450):573–585.CrossrefGoogle Scholar
  • Schindler RM (1998) Consequences of perceiving oneself as responsible for obtaining a discount: Evidence for smart-shopper feelings. J. Consumer Psych. 7(4):371–392.CrossrefGoogle Scholar
  • Sheth JN, Newman BI, Gross BL (1991) Consumption Values and Market Choices: Theory and Applications (South-Western, Cincinnati).Google Scholar
  • Short JC, Ketchen DJ, McKenny AF, Allison TH, Ireland RD (2017) Research on crowdfunding: Reviewing the (very recent) past and celebrating the present. Entrepreneurship Theory Practice 41(2):149–160.CrossrefGoogle Scholar
  • Simonson I, Drolet A (2004) Anchoring effects on consumers’ willingness‐to‐pay and willingness‐to‐accept. J. Consumer Res. 31(3):681–690.CrossrefGoogle Scholar
  • Snyder CR, Fromkin HL (1980) Uniqueness: The Human Pursuit of Difference (Plenum Press, New York).CrossrefGoogle Scholar
  • Stock A, Balachander S (2005) The making of a “hot product”: A signaling explanation of marketers’ scarcity strategy. Management Sci. 51(8):1181–1192.LinkGoogle Scholar
  • Thompson CJ, Rindfleisch A, Arsel Z (2006) Emotional branding and the strategic value of the doppelgänger brand image. J. Marketing 70(1):50–64.CrossrefGoogle Scholar
  • Tomczak A, Brem A (2013) A conceptualized investment model of crowdfunding. Venture Capital 15(4):335–359.CrossrefGoogle Scholar
  • Tversky A, Kahneman D (1992) Advances in prospect theory: Cumulative representation of uncertainty. J. Risk Uncertainty 5(4):297–323.CrossrefGoogle Scholar
  • Urbany JE, Bearden WO, Weilbaker DC (1988) The effect of plausible and exaggerated reference prices on consumer perceptions and price search. J. Consumer Res. 15(1):95–110.CrossrefGoogle Scholar
  • Van de Ven WPMM, Van Praag BMS (1981) The demand for deductibles in private health insurance: A probit model with sample selection. J. Econometrics 17(2):229–252.CrossrefGoogle Scholar
  • Verhallen TMM, Robben HSJ (1995) Unavailability and the evaluation of goods. Kyklos 48(3):369–387.CrossrefGoogle Scholar
  • Wang Z, Yang L, Kang Y, Hahn J (2016) Strategies of effective reward scheme design on crowdfunding platforms. Annual Meeting Acad. Management, Anaheim, CA.Google Scholar
  • Wathieu L, Muthukrishnan AV, Bronnenberg BJ (2004) The asymmetric effect of discount retraction on subsequent choice. J. Consumer Res. 31(3):652–657.CrossrefGoogle Scholar
  • Wooldridge JM (2010) Econometric Analysis of Cross Section and Panel Data (MIT Press, Cambridge, MA).Google Scholar
  • Worchel S, Lee J, Adewole A (1975) Effects of supply and demand on ratings of object value. J. Personality Soc. Psych. 32(5):906–914.CrossrefGoogle Scholar
  • Xiao S, Zhou T, Tan Y (2017) Reward scheme design for online crowdfunding projects. Working paper, http://ssrn.com/abstract=3048158.Google Scholar
  • Xiao S, Tan X, Dong M, Qi J (2014) How to design your project in the online crowdfunding market? Evidence from Kickstarter. Internat. Conf. Inform. Systems (Association for Information Systems, Auckland, NZ).Google Scholar
  • Yang L, Hahn J (2017) The role of prior experience in entrepreneurial learning Acad. Management Proc. 2017(1):15565.Google Scholar
  • Zheng A, Gong J, Pavlou PA (2017) On using the lottery in crowdfunding platforms: “Crowding in” the masses but “crowding out” success. Working paper, http://ssrn.com/abstract=2916807.Google Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.