Love cannot buy you money: Resource exchange on reward‐based crowdfunding platforms

Abstract

Reward‐based crowdfunding platforms – in which campaigns exchange rewards for financial backing to develop a product or service – are one of the fastest‐growing segments of the crowdfunding industry. We use an extension of social exchange theory (SET) called the resource theory of social exchange (RTSE) to examine resource exchanges through rewards on Kickstarter. A resource exchange occurs when a project backer and project creator exchange money (ie, financial backing) for a reward (eg, a thank you or a t‐shirt). A project creator can develop a reward portfolio that contains various types of resources, which in the RTSE are categorised as love, status, information, money, goods and services. Our study provides a comprehensive examination of resource exchange on a major reward‐based crowd funding platform, answering the call to investigate the effects of a key element of such platforms – rewards. We find that the types of resources project creators include in the reward portfolios they offer should be carefully considered. Specifically, our results indicate it is more beneficial to offer rewards that contain universal and concrete resources (eg, goods, services) than resources that are particularistic and symbolic (eg, love, status). However, the positive effect of offering universal and concrete resources as rewards is diminished as the fundraising goal is increased, which suggests that the optimal design of the reward portfolio is contingent on other characteristics of the campaign. Moreover, our findings reveal that while it is advantageous to offer more rewards, it is disadvantageous to offer too many different types of resources across those rewards. Overall, our study adds depth to the understanding of resource exchange in reward‐based crowdfunding and provides practical insight into how to design reward portfolios.

Untangling the influence of perceived sustainability orientation on value-co-creation behavior in crowdfunding process: investigating a mediation model

“…A multi-group analysis is conducted to check whether the hypothesized relationships are invariant across the projects and backers. As the funding ratio is measured by the ratio of money raised and the funding goal has been regarded as the level of crowdfunding success (James et al. , 2021; Frydrych et al.…”

“…A multi-group analysis is conducted to check whether the hypothesized relationships are invariant across the projects and backers. As the funding ratio is measured by the ratio of money raised and the funding goal has been regarded as the level of crowdfunding success (James et al, 2021;Frydrych et al, 2014), we divide the dataset into two groups as evenly as possible according to the funding-ratio sequence. The low-level group (N 5 227) has a funding ratio below 1.457, while the high-level group (N 5 228) is above 1.457.…”

Satisfaction or gratitude? Exploring the disparate effects of physicians' knowledge sharing on patients' service evaluation in online medical consultations

“…Social exchange is conceptualised as a joint activity of two or more actors in which the task is to generate benefits for each individual by exchanging behaviours or goods that actors cannot achieve alone (James et al, 2021; Lawler, 2001). The affect theory of social exchange expands the domain of exchange theorising by constructing exchange outcomes as having emotional effects that vary in form and intensity (Lawler & Thye, 1999).…”

A Data-Driven Expectation Prediction Framework Based on Social Exchange Theory

“…While Homans regarded social exchange behavior as the exchange of material and non-material commodities ( Treviño, 2009 ), Foa divided social exchange resources into six categories: love, status, service, information, commodity, and money ( Cooper-Thomas et al, 2018 ; James et al, 2021 ). They refined the concept and classification of exchange resources and pointed out that individuals tend to exchange similar resources ( Roloff, 1981 ), for example, it is easier to exchange money for products than to exchange love for money ( James et al, 2021 ). In the context of the digital service economy, the interactive forms and exchange contents of the participation of users in consumption exchange have become richer.…”