Financing target and resale pricing in reward-based crowdfunding

Lei Xu, Qingxia Wu, Peng Du, Xiaojiao Qiao, Sang Bing Tsai, Dahui Li

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

Resale is an effective tool for reward-based crowdfunding creators to make more profit after crowdfunding successfully. On the one hand, funds raised during the crowdfunding affect the resale pricing as a capital constraint; on the other hand, backers' strategic purchasing behavior in the resale stage can also disturb the creator's financing target decision-making through affecting resale pricing. In view of this, this paper builds a two-stage crowdfunding model to examine the interaction between the financing target and resale pricing in the presence of strategic backers. The results show that a lower financing amount leads to higher prices in the resale stage due to the rationing effect, and suppresses price volatility due to strategic purchasing behavior. In contrast, a higher financing amount enables the creator to build a large capacity, which does not restrict the resale prices and profit. Besides, in the context of high unit production cost or high backer patience level, there is no need for the creator to set a high financing target at the risk of crowdfunding failure.

Original languageEnglish (US)
Article number1297
JournalSustainability (Switzerland)
Volume10
Issue number4
DOIs
StatePublished - Apr 23 2018
Externally publishedYes

Bibliographical note

Funding Information:
This research was supported in part by the National Natural Science Foundation of China (grant nos. 71672125, 71702130, 71702129, 71701151), a major research project of the National Natural Science Foundation of China (grant no. 91646117), the Humanities and Social Science Foundation of Ministry of Education of China (grant no. 17YJC630113), and a project of the High School Innovation Team of Tianjin Province (grant no. TD13-5018)

Funding Information:
Acknowledgments: This research was supported in part by the National Natural Science Foundation of China

Funding Information:
(grant nos. 71672125, 71702130, 71702129, 71701151), a major research project of the National Natural Science

Funding Information:
Foundation of China (grant no. 91646117), the Humanities and Social Science Foundation of Ministry of (grant no. TD13-5018). Education of China (grant no. 17YJC630113), and a project of the High School Innovation Team of Tianjin

Publisher Copyright:
© 2018 by the authors.

Copyright:
Copyright 2018 Elsevier B.V., All rights reserved.

Keywords

  • Financing target
  • Resale pricing
  • Reward-based crowdfunding
  • Strategic purchasing behavior

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