Follow the crowd: Social information and crowdfunding donations in a large field experiment

Abstract

Purposely guiding human decision making with a discrete suggestion, ‘nudging’, is increasingly popular. One particularly promising nudge is to provide decision makers with information about the decisions of others, also referred to as social information. Social information is often applied in fundraising campaigns to increase individual donations. A discrete suggestion such as the donation amount of others can result in donors donating similar amounts. We examined effects of social information in a relatively new context, namely crowdfunding. Crowdfunding is a new online fundraising tool. Our study, based on a large natural field experiment (n = 24,070), tests to what extent social information affects online donation behavior and how its effects vary throughout the duration of a campaign. We show that social information increases the individual donation amount by 17%, which is close to the average of 14% found in previous studies. However, social information did not attract more donors: the participation rate was not affected. Our study is the first to pinpoint the stage of the funding campaign at which the effect of social information is most pronounced. We found that social information is most effective in increasing donations at the beginning of crowdfunding campaigns. All materials for this article are available at https://osf.io/epuj6/.