The Circular Effects of Popularity Information and Electronic Word-of-Mouth on Consumer Decision-Making: Evidence from a Crowdfunding Platform

Ferdinand Thies, Michael Wessel

Research output: Chapter in Book/Report/Conference proceedingBook chapterResearchpeer-review

Abstract

Potential backers of crowdfunding campaigns often need to make investment decisions based on limited information, as the project they invest in has not come into existence at the time the campaign is running. As a consequnce, other evidence for the trustworthiness and quality of a crowdfunding campaign, such as popularity information and electronic Word-of-Mouth (eWOM), are becoming increasingly important. In order to identify interdependencies between these influntial factors and the backers´ decisions, we deploy the Panel Vector Auto-Regression (PVAR) methodology to estimate impulse-response functions that depict the response of one variable to a shock in another variable. Preliminary results from Kickstarter suggest that a positive shock in popularity information is associated with a higher number of campaign backers in the next period. The same is tru for eWOM within the social networks Twitter and Facebook. Despite strong feedback cycles within platforms, our preliminary results show little evidence for cross-platform effects between social media and the number of backers and vice versa. First results show that our current understanding of the impact of popularity information and eWOM on decision making is far from conclusive. We will further validate these findings by extending the dataset, both in time and scope.
Original languageEnglish
Title of host publicationECIS 2014 Proceedings
EditorsMichel Avital, Jan Marco Leimeister, Ulrike Schultze
Number of pages10
Place of PublicationAtlanta, GA
PublisherAssociation for Information Systems. AIS Electronic Library (AISeL)
Publication date2014
ISBN (Print)9780991556700
Publication statusPublished - 2014
Externally publishedYes
EventThe 22nd European Conference on Information Systems (ECIS) 2014: Digital Work, Digital Life - David Intercontinental Hotel, Tel Aviv, Israel
Duration: 9 Jun 201411 Jun 2014
Conference number: 22
http://ecis2014.eu/

Conference

ConferenceThe 22nd European Conference on Information Systems (ECIS) 2014
Number22
LocationDavid Intercontinental Hotel
CountryIsrael
CityTel Aviv
Period09/06/201411/06/2014
Internet address
SeriesProceedings of the European Conference on Information Systems
ISSN0000-0034

Keywords

  • Popularity information
  • Electronic word-of-mouth
  • Informational cascades
  • Crowdfunding
  • Panel vector auto-Regression

Cite this

Thies, F., & Wessel, M. (2014). The Circular Effects of Popularity Information and Electronic Word-of-Mouth on Consumer Decision-Making: Evidence from a Crowdfunding Platform. In M. Avital, J. M. Leimeister, & U. Schultze (Eds.), ECIS 2014 Proceedings Association for Information Systems. AIS Electronic Library (AISeL). Proceedings of the European Conference on Information Systems http://aisel.aisnet.org/cgi/viewcontent.cgi?article=1066&context=ecis2014