Improving the efficiency of allocating crowd donations with agent-based simulation model

Abstract

Crowdfunding platforms are emerging as an important online social platform to raise capital and awareness for innovative projects. When considered as a general online social system, the goal of a crowdfunding platform is to efficiently allocate a large number of small funds to promising new projects. However, the efficiency of donation allocation and the success rate of projects can be influenced by the behavior of donors, such as how they evaluate each project and choose the projects to donate. To understand how such behavior could impact crowdfunding market, we developed an agent-based model of crowdfunding to investigate three factors, i.e., project visibility, noise of perceived project quality, and donor strategies. These factors may impact the efficiency of a crowdfunding platform.