City Research Online

The Signal Value of Crowdfunded Products

Acar, O. A. ORCID: 0000-0003-1993-0921, Dahl, D. W., Fuchs, C. and Schreier, M. (2021). The Signal Value of Crowdfunded Products. Journal of Marketing Research,

Abstract

Crowdfunding has emerged as an alternative means of financing new ventures by utilizing the financial support of a large group of individual investors. In this research, we ask a novel question: does being crowdfunded carry any signal value for the broader market of observing consumers? Seven studies reveal a consumer preference for “crowdfunded products”, even after controlling for a product’s objective product characteristics. We identify two inferences that help explain this effect: (1) consumers perceive crowdfunded products to be of higher quality, and (2) they believe that supporting crowdfunding reduces inequality in the marketplace. We further document an important boundary condition of the first inference: our identified effect reverses in high risk domains (e.g., products that involve high physical risk), due to consumer perceptions that the crowdfunding model lacks sufficient professionalism to mitigate risk. With regard to the second inference, we find that the positive crowdfunding effect is particularly strong among consumers who value social equality. Taken together, our work sheds new light on consumer perceptions of crowdfunding, elucidates why and when consumers prefer crowdfunded products, and offers actionable implications for managers.

Publication Type: Article
Additional Information: Acar, O. A. , Dahl, D. W., Fuchs, C. and Schreier, M. (2021). The Signal Value of Crowdfunded Products. Journal of Marketing Research, Copyright © 2021, The Author(s).
Publisher Keywords: Crowdfunding, start-ups, new products, inequality, consumer inferences
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HG Finance
Departments: Business School > Management
Date Deposited: 07 Apr 2021 11:15
URI: https://openaccess.city.ac.uk/id/eprint/25871
[img]
Preview
Text - Accepted Version
Download (795kB) | Preview

Export

Downloads

Downloads per month over past year

View more statistics

Actions (login required)

Admin Login Admin Login