Gordon Burtch

An Empirical Examination of the Antecedents and Consequences of Contribution Patterns in Crowd-Funded Markets

Crowd-funded markets have recently emerged as a novel source of capital for entrepreneurs. As the economic potential of these markets is now being realized, they are beginning to go mainstream, a trend reflected by the explicit attention crowdfunding has received in the American Jobs Act as a potential avenue for economic growth, as well as the recent focus that regulators such as the U.S. Securities and Exchange Commission have placed upon it. Although the formulation of regulation and policy surrounding crowd-funded markets is becoming increasingly important, the behavior of crowdfunders, an important aspect that must be considered in this formulation effort, is not yet well understood. A key factor that can influence the behavior of crowd funders is information on prior contribution behavior, including the amount and timing of others’ contributions, which is published for general consumption. With that in mind, in this study, we empirically examine social influence in a crowd-funded marketplace for online journalism projects, employing a unique data set that incorporates contribution events and Web traffic statistics for approximately 100 story pitches. This data set allows us to examine both the antecedents and consequences of the contribution process. First, noting that digital journalism is a form of public good, we evaluate the applicability of two competing classes of economic models that explain private contribution toward public goods in the presence of social information: substitution models and reinforcement models. We also propose a new measure that captures both the amount and the timing of others’ contribution behavior: contribution frequency (dollars per unit time). We find evidence in support of a substitution model, which suggests a partial crowding-out effect, where contributors may experience a decrease in their marginal utility from making a contribution as it becomes less important to the recipient. Further, we find that the duration of funding and, more importantly, the degree of exposure that a pitch receives over the course of the funding process, are positively associated with readership upon the story’s publication. This appears to validate the widely held belief that a key benefit of the crowdfunding model is the potential it offers for awareness and attention-building around causes and ventures. This last aspect is a major contribution of the study, as it demonstrates a clear linkage between marketing effort and the success of crowd-funded projects.

The hidden cost of accommodating crowdfunder privacy preferences: a randomized field experiment

Online crowdfunding has received a great deal of attention as a promising avenue to fostering entrepreneurship and innovation. Because online settings bring increased visibility and traceability of transactions, many crowdfunding platforms provide mechanisms that enable a campaign contributor to conceal his or her identity or contribution amount from peers. We study the impact of these information (privacy) control mechanisms on crowdfunder behavior. Employing a randomized experiment at one of the world’s largest online crowdfunding platforms, we find evidence of both positive (e.g., comfort) and negative (e.g., privacy priming) causal effects. We find that reducing access to information controls induces a net increase in fundraising, yet this outcome results from two competing influences — treatment increases willingness to engage with the platform (a 4.9% increase in the probability of contribution) and simultaneously decreases the average contribution (a U.S.

Leveraging Information Systems for Enhanced Product Innovation

5.81 decline). This decline derives from a publicity effect, wherein contributors respond to a lack of privacy by tempering extreme contributions. We unravel the causal mechanisms that drive the results and discuss the implications of our findings for the design of online platforms.

Secret Admirers: An Empirical Examination of Information Hiding and Contribution Dynamics in Online Crowdfunding

While firms have become more tech savvy, the leveraging of information systems for product innovation remains a challenge to firms, from large multinationals to the smallest start-ups. Successful practices vary, but one commonality is experimentation. As a result, firms are trying out a range of digital initiatives. This study explores three important methods by which firms are using information systems to improve the process of product innovation or new product development. These include: “listening in” to social media, crowd-funding, and virtual product teams.

Can You Gig it? An Empirical Examination of the Gig-Economy and Entrepreneurial Activity

Individuals’ actions in online social contexts are growing increasingly visible and traceable. Many online platforms account for this by providing users with granular control over when and how their identity or actions are made visible to peers. However, little work has sought to understand the effect that a user’s decision to conceal information might have on observing peers, who are likely to refer to that information when deciding on their own actions. We leverage a unique impression-level dataset from one of the worlds largest online crowdfunding platforms, where contributors are given the option to conceal their username or contribution amount from public display, with each transaction. We demonstrate that when campaign contributors elect to conceal information, it has a negative influence on subsequent visitors’ likelihood of conversion, as well as on their average contributions, conditional on conversion. Moreover, we argue that social norms are an important driver of information concealment, providing evidence of peer influence in the decision to conceal. We discuss the implications of our results for the provision of online information hiding mechanisms, as well as the design of crowdfunding platforms and electronic markets more generally.

Examining the Impact of Ridehailing Services on Public Transit Use

We examine how the entry of gig-economy platforms influences local entrepreneurial activity. On one hand, such platforms may reduce entrepreneurial activity by offering stable employment for the un- and under-employed. On the other hand, such platforms may enable entrepreneurial activity by offering work flexibility that allows the entrepreneur to re-deploy resources strategically in order to pursue her nascent venture. To resolve this tension, we exploit a natural experiment, the entry of the ride-sharing platform Uber X and the on-demand delivery platform Postmates into local areas. We examine the effect of each on crowdfunding campaign launches at Kickstarter, the world’s largest reward-based crowdfunding platform. Results indicate a negative and significant effect on crowdfunding campaign launches, and thus local entrepreneurial activity, after entry of Uber X or Postmates. Strikingly, the effect appears to accrue primarily to unfunded and under-funded projects, suggesting that gig-economy platforms predominantly reduce lower quality entrepreneurial activity by offering viable employment for the un- and under-employed. We corroborate our findings with US Census data on self-employment, which indicate similar declines following the entry of Uber X, and with a small scale survey of gig-economy participants.

Unknowns of the gig-economy

We examine the impact that ride-hailing services have had on the demand for different modes of public transit in the United States, with a particular focus on understanding heterogeneity in the effects. We assess these effects using a panel dataset that combines information on public transit utilization (from the Federal Transit Administration) with information on ride-hailing providers’ staggered arrival into different locations, based on public press-releases and newspaper reports. Our analysis indicates that, on average, ride-hailing services have led to significant reductions in the utilization of city bus services, while increasing utilization of commuter rail services. These average effects are also subject to a great deal of contextual heterogeneity, depending on the size of the local population, rates of violent crime, weather, gas prices, transit riders’ average trip distance and the quality of overall quality of public transit options. We demonstrate the robustness of our findings to alternative model specifications. Our findings contribute to the prior literature on technology substitution and complementarity and suggest explanations for contradictory findings that have been reported on ride-hailing’s influence upon public transit demand. We also offer useful insights for policymakers, highlighting the nuanced implications of ride-hailing services for different transit operators, depending on the local context.

Stimulating online reviews by combining financial incentives and social norms

Seeking multidisciplinary research into the rapidly evolving gig-economy.

Social network integration and user content generation: evidence from natural experiments

In hopes of motivating consumers to provide larger volumes of useful reviews, many retailers offer financial incentives. Here, we explore an alternative approach, social norms. We inform individuals about the volume of reviews authored by peers. We test the effectiveness of using financial incentives, social norms, and a combination of both strategies in motivating consumers. In two randomized experiments, one in the field conducted in partnership with a large online clothing retailer based in China and a second on Amazon Mechanical Turk, we compare the effectiveness of each strategy in stimulating online reviews in larger numbers and of greater length. We find that financial incentives are more effective at inducing larger volumes of reviews, but the reviews that result are not particularly lengthy, whereas social norms have a greater effect on the length of reviews. Importantly, we show that the combination of financial incentives and social norms yields the greatest overall benefit by motivating review...

Motivating User-Generated Content with Performance Feedback: Evidence from Randomized Field Experiments

This study examines how social network integration (i.e., integration of online platforms with other social media services, for example, with Facebook or Twitter) can affect the characteristics of user-generated content (volume and linguistic features) in the context of online reviews. Building on the social presence theory, we propose a number of hypotheses on how social network integration affects review volume and linguistic features of review text. We consider two natural experiments at leading online review platforms (Yelp.com and TripAdvisor.com), wherein each implemented a social network integration with Facebook. Constructing a unique panel dataset of online reviews for a matched set of restaurants across the two review sites, we estimate a difference-in-differences (DID) model to assess the impact of social network integration. We find that integration with Facebook increased the production of user-generated content and positive emotion in review text, while simultaneously decreasing cognitive language, negative emotion, and expressions of disagreement (negations) in review text. Our findings demonstrate that social network integration works as a double-edged sword. On the one hand, integration provides benefits in terms of increased review quantity. On the other hand, these benefits appear to come at the cost of reduced review quality, given past research which has found that positive, emotional reviews are perceived by users to be less helpful. We discuss the implications of these results as they relate to the creation of sustainable online social platforms for user content generation.