Early Winner Takes All: Exploring the Impact of Initial Herd on Overfunding in Crowdfunding Context

Yijing Li, Albert Fei Liu, Wenjie Fan, Eric T. K. Lim, Yong Liu

Research output: Chapter in Book/Report/Conference proceedingArticle in proceedingsResearchpeer-review


Crowdfunding endows entrepreneurs with a means of kickstarting their businesses. The amount of investment that can be elicited through crowdfunding campaigns often surpasses fundraisers’ expectation, leading to market inefficiencies. Yet, this phenomenon of overfunding has garnered relatively little attention in past studies. Subscribing to signaling theory, we strive to shed light on the causes of overfunding by positing crowdfunding platforms as fertile breeding grounds for herding behavior. Specifically, we attempt to capture the dynamic nature of herding by decomposing herds on crowdfunding platforms into their constituent dimensions of maturity, intensity, and persistency. We further endeavor to explore how these constituent dimensions shape overfunding. This study advances a model to testify to the instrumental role of initial herds in amplifying overfunding on the crowdfunding platforms, which in turn could offer insights into remedying the problem of overfunding.
Original languageEnglish
Title of host publicationPACIS 2018 Proceedings
EditorsMotonari Tanabu, Dai Senoo
Number of pages8
Place of PublicationAtlanta, GA
PublisherAssociation for Information Systems. AIS Electronic Library (AISeL)
Publication date2018
Article number18
Publication statusPublished - 2018
EventThe 22nd Pacific Asia Conference on Information Systems. PACIS 2018 - Yokohama Royal Park Hotel, Yokohama, Japan
Duration: 26 Jun 201830 Jun 2018
Conference number: 22


ConferenceThe 22nd Pacific Asia Conference on Information Systems. PACIS 2018
LocationYokohama Royal Park Hotel
SponsorAssociation for Information Systems
Internet address


  • Crowdfunding
  • Herding behavior
  • Overfunding

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