Crowdfunding: Designing an effective reward structure

16Citations
Citations of this article
101Readers
Mendeley users who have this article in their library.

Abstract

Many crowdfunding platforms allow developers maximum flexibility in terms of the number and types of rewards offered in a project. However, designing an effective reward structure continues to be a major challenge. This article empirically examines consumers’ responsiveness to different factors related to reward structures on crowdfunding platforms. We collected data from 2,262 rewards programs across 219 projects and applied a mixed Tweedie model to investigate the impact of various reward structures on the number of backers and the revenue generated at each reward tier. The results revealed a significant effect of reward limit setting on backers’ interest, but this effect varies by reward tiers. Higher tiers attenuate price sensitivity. The reward type matters as well: material rewards are better received than symbolic ones on crowdfunding platforms, but only in lower reward tiers. These findings have direct implications for launching crowdfunding projects that will be more effective in creating buzz and reaching their fundraising goals.

Cite

CITATION STYLE

APA

Wei Shi, S. (2018). Crowdfunding: Designing an effective reward structure. International Journal of Market Research, 60(3), 288–303. https://doi.org/10.1177/1470785317744113

Register to see more suggestions

Mendeley helps you to discover research relevant for your work.

Already have an account?

Save time finding and organizing research with Mendeley

Sign up for free