Exploring the Nudging and Counter-nudging Effects of Campaign Updates in Crowdfunding

Crowdfunding has emerged as a vital financing avenue for entrepreneurs to realize their ventures. With limited information availability, crowd-funders may choose to first follow the progress of interested crowdfunding campaigns, such as monitoring project updates to acquire more information for justifying investment decision, before making pledges. Although campaign updates have been touted to be a salient driver of fundraising success, the underlying mechanism for this relationship remains unclear. Subscribing to nudge theory, we strive to shed light on how update strategies, such as frequency and message length, can serve as nudges to convert project followers to actual funders. Specifically, we posit a dual-role of campaign updates whereby an over-zealous update strategy may induce a counter-nudging effect that deters prospective funders, what we labelled as ‘over-nudging’. This study advances a model to account for both the nudging and counter-nudging effects of campaign updates in crowdfunding, which could yield insights for fundraisers to optimize their update strategy and in turn, get their business off the ground.