Team rivalry and lending on crowdfunding platforms: an empirical analysis

Abstract

Background: Prosocial crowdfunding helps the underprivileged obtain non-profit seeking loans from multitudinous lenders. Some platforms introduce team competition to motivate member participation and may thus induce team rivalry. Methods: We investigate how team rivalry affects lending decisions using data from Kiva.org. We argue that a rivalry relationship may engage teams to compete directly against rivals by lending to the same project or prevent them from doing so because they intend not to cooperate. Result: We find that a team is less likely to lend to a project that has received funding from its rival team, suggesting that rival teams tend to avoid cooperation. Conclusions: We discuss the implications of our findings for crowdfunding and competition-based motivation mechanisms in general.