Bias‐driven marketing that instigates pledging to a crowdfunding campaign: An experimental consideration of behavioral anomalies

Abstract

Bias‐driven marketing leverages the behavioral biases of investors for greater marketing gains. To transform cognitively biased individuals from antagonists into allies, the marketers need to decipher the critical crowdfunding attributes, which ultimately motivate behaviorally biased crowdfunders to invest in crowdfunding campaigns. Hence, this study seeks to investigate the influential factors concerning four behavioral biases that accelerate crowdfunding adoption. A conceptual model, parameterized using conjoint analysis, is developed and administered in an agent‐based behavior model to effectively determine the influential crowdfunding attributes, which will induce the biased investors to adopt crowdfunding. The results revealed that status quo biased individuals adopted the crowdfunding campaign when launched by well‐known and reputed fund raisers. Whereas, hyperbolic discounting bias accelerated the adoption when the campaign reached more than 75% of subscription and duration was lesser than 30 days. The results also indicated that framing bias enhanced the adoption when the risk inherent in the project is disclosed. Finally, the results also claimed that individuals liable to loss aversion bias expected a known funder, who posts frequent updates and preferred the All‐or‐Nothing crowdfunding model. The experimental results of the study provide insights to the marketers that crowdfunding campaigns can be successfully strategized through the exploration of underlying cognitive biases and the corresponding motivational cues that accentuate the pledging behavior of the funders. Given the importance of an effective marketing strategy in crowdfunding adoption, this study offers one such recommendation to the crowdfunding campaigners by demonstrating how bias driven marketing strategy enhances the adoption rate of the campaigns. With the strong pieces of evidence obtained from this study, it is anticipated that behavioral biases, drawn from the neuromarketing theory, will no longer be viewed as cognitive errors from the investor's perspective. Rather, it will be viewed as a boon from the marketer's perspective as the bias‐based marketing strategies have the potential to achieve a fully subscribed crowdfunding campaign.

How relationship norms and task complexity affect consumer perceptions of quality in crowdsourcing

“…Crowdsourcing is a recent concept that relies on open collaboration for new product development (Panneerselvam & Joe Arun, 2022; Schlagwein & Bjørn‐Andersen, 2014), helping organizations to innovate and increase sales (Howe, 2006, 2009; Nishikawa et al, 2017). Crowdsourcing initiatives often challenge the “crowd of customers” to provide product solutions that meet customers' expectations (Howe, 2006; Nishikawa et al, 2017; Palacios et al, 2016).…”

“…Crowdsourcing is a recent concept that relies on open collaboration for new product development (Panneerselvam & Joe Arun, 2022;Schlagwein & Bjørn-Andersen, 2014), helping organizations to innovate and increase sales (Howe, 2006(Howe, , 2009Nishikawa et al, 2017).…”

“…Crowdsourcing has become a major practice for developing profitable innovations (Business Insider, 2019; Forbes, 2020; Jin et al, 2021; Panneerselvam & Joe Arun, 2022; Stremersch et al, 2022). Crowdsourcing is defined as a corporate activity performed by a number of individuals in response to an online call by a company (Cao, Feng, & Wiles, 2023; Estellés‐Arolas & González‐Ladrón‐de‐Guevara, 2012; Howe, 2006).…”