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

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

Department of Digitalization

Research output: Chapter in Book/Report/Conference proceeding › Article in proceedings › Research › peer-review

Abstract

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 language	English
Title of host publication	PACIS 2018 Proceedings
Editors	Motonari Tanabu, Dai Senoo
Number of pages	8
Place of Publication	Atlanta, GA
Publisher	Association for Information Systems. AIS Electronic Library (AISeL)
Publication date	2018
Article number	18
Publication status	Published - 2018
Event	The 22nd Pacific Asia Conference on Information Systems. PACIS 2018 - Yokohama Royal Park Hotel, Yokohama, Japan Duration: 26 Jun 2018 → 30 Jun 2018 Conference number: 22 http://pacis2018.org/

Conference

Conference	The 22nd Pacific Asia Conference on Information Systems. PACIS 2018
Number	22
Location	Yokohama Royal Park Hotel
Country/Territory	Japan
City	Yokohama
Period	26/06/2018 → 30/06/2018
Sponsor	Association for Information Systems
Internet address	http://pacis2018.org/

Keywords

Crowdfunding
Herding behavior
Overfunding

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Cite this

Li, Y., Liu, A. F., Fan, W., Lim, E. T. K., & Liu, Y. (2018). Early Winner Takes All: Exploring the Impact of Initial Herd on Overfunding in Crowdfunding Context. In M. Tanabu, & D. Senoo (Eds.), PACIS 2018 Proceedings Article 18 Association for Information Systems. AIS Electronic Library (AISeL). https://aisel.aisnet.org/cgi/viewcontent.cgi?article=1017&context=pacis2018

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

abstract = "Crowdfunding endows entrepreneurs with a means of kickstarting their businesses. The amount of investment that can be elicited through crowdfunding campaigns often surpasses fundraisers{\textquoteright} 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.",

keywords = "Crowdfunding, Herding behavior, Overfunding, Crowdfunding, Herding behavior, Overfunding",

author = "Yijing Li and Liu, {Albert Fei} and Wenjie Fan and Lim, {Eric T. K.} and Yong Liu",

year = "2018",

language = "English",

editor = "Motonari Tanabu and Dai Senoo",

booktitle = "PACIS 2018 Proceedings",

publisher = "Association for Information Systems. AIS Electronic Library (AISeL)",

note = "The 22nd Pacific Asia Conference on Information Systems. PACIS 2018 ; Conference date: 26-06-2018 Through 30-06-2018",

url = "http://pacis2018.org/",

}

Li, Y, Liu, AF, Fan, W, Lim, ETK & Liu, Y 2018, Early Winner Takes All: Exploring the Impact of Initial Herd on Overfunding in Crowdfunding Context. in M Tanabu & D Senoo (eds), PACIS 2018 Proceedings., 18, Association for Information Systems. AIS Electronic Library (AISeL), Atlanta, GA, The 22nd Pacific Asia Conference on Information Systems. PACIS 2018, Yokohama, Japan, 26/06/2018. <https://aisel.aisnet.org/cgi/viewcontent.cgi?article=1017&context=pacis2018>

Early Winner Takes All: Exploring the Impact of Initial Herd on Overfunding in Crowdfunding Context. / Li, Yijing; Liu, Albert Fei; Fan, Wenjie et al.
PACIS 2018 Proceedings. ed. / Motonari Tanabu; Dai Senoo. Atlanta, GA: Association for Information Systems. AIS Electronic Library (AISeL), 2018. 18.

Research output: Chapter in Book/Report/Conference proceeding › Article in proceedings › Research › peer-review

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AB - 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.

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