Out of control or right on the money? Funder self-efficacy and crowd bias in equity crowdfunding

Stevenson, Ryan A.; Ciuchta, Michael P.; Letwin, Chaim; Dinger, Jenni; Vancouver, Jeffrey B.

doi:10.1016/j.jbusvent.2018.05.006

Cited by 56 publications

(33 citation statements)

References 119 publications

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“…Recent work in crowdfunding research has focused on observational studies that allow for causal interpretations of data by adjusting for observed differences in the characteristics of campaigns (e.g., Chan and Parhankangas 2017;Parhankangas and Renko 2017;Skirnevskiy et al 2017). Other work has focused on estimating causal effects using random assignment to experiments using differences in campaign characteristics as treatment effects (e.g., Allison et al 2017;Stevenson et al 2018;Younkin and Kuppuswamy 2018). Our study, in contrast, focuses on prediction to build models that control for confounding factors and explanatory variables to crowdfunding campaign success.…”

Section: Resultsmentioning

confidence: 99%

Predicting outcomes in crowdfunding campaigns with textual, visual, and linguistic signals

Kaminski

Hopp

2019

Small Bus Econ

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This paper introduces a neural network and natural language processing approach to predict the outcome of crowdfunding startup pitches using text, speech, and video metadata in 20,188 crowdfunding campaigns. Our study emphasizes the need to understand crowdfunding from an investor's perspective. Linguistic styles in crowdfunding campaigns that aim to trigger excitement or are aimed at inclusiveness are better predictors of campaign success than firm-level determinants. At the contrary, higher uncertainty perceptions about the state of product development may substantially reduce evaluations of new products and reduce purchasing intentions among potential funders. Our findings emphasize that positive psychological language is salient in environments where objective information is scarce and where investment preferences are taste based. Employing enthusiastic language or showing the product in action may capture an individual's attention. Using all technology and design-related crowdfunding campaigns launched on Kickstarter, our study underscores the need to align potential consumers' expectations with the visualization and presentation of the crowdfunding campaign.

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Section: Resultsmentioning

confidence: 99%

Predicting outcomes in crowdfunding campaigns with textual, visual, and linguistic signals

Kaminski

Hopp

2019

Small Bus Econ

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“…Moreover, stemming from the fact that it has been proved that high self-efficacy leads to cognitive biases in managerial decision making (Stevenson et al 2019;Cristofaro et al 2020), we suggest whether high levels of self-leadership can lead to the occurrence of cognitive errors when making decisions. In particular, due to the already discovered relationship between self-efficacy and Self-Serving Bias (SSB)-also called Self-attribution bias (used interchangeably within the text)-which involves the internal attribution of successes and external attribution of failures (Watt and Martin 1994), a second research questions emerges as follows: "How does self-leadership influence the attribution of successes/failures?…”

Section: Introductionmentioning

confidence: 86%

Core Self-Evaluations, Self-Leadership, and the Self-Serving Bias in Managerial Decision Making: A Laboratory Experiment

Cristofaro

Giardino

2020

Administrative Sciences

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The self-leadership construct has received great attention from scholars over the last 40 years due to its capacity to influence personal effectiveness. However, despite strongly influencing individuals’ self-efficacy, performed studies did not determine whether self-leadership is connected, and how, with the Core-Self Evaluation (CSE) trait—a complex personality disposition based on self-efficacy, self-esteem, locus of control, and emotional stability—that has been found impacting decision-making processes within organizations. Moreover, it has not been identified whether individuals with a high level of self-leadership are more prone to be victims of some cognitive biases in decision-making processes, such as the internal attribution of successes and external attribution of failures (i.e., Self-Serving Bias, SSB) that are usually led by the strong belief of individuals in their own capacities. The outlined gaps can be substantiated by the following two research questions: “How is self-leadership related with CSE?” and “How does self-leadership influence the attribution of successes/failures?”. To answer these questions, the following were identified and analyzed for 93 executives: (i) the tendency in the attribution of successes and failures, (ii) the CSE, and (iii) their self-leadership level. Results show that: (i) a high level of CSE is connected with high levels of self-leadership; (ii) high levels of self-leadership bring individuals to the internal attribution of successes and external attribution of failures. This work reinforces the stream of (the few) studies that considers a high level of CSE and self-leadership as not always being desirable for managerial decision-making processes and consequent performance. This paper aims to enrich the debate concerning the relations between, on the one hand, self-leadership and, on the other hand, personality traits between self-leadership and decision making.

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“…For example, campaign success is dependent on a range of observed and unobserved features, which renders the isolation of the effect of “values” across contexts extremely difficult. Drawing on the work of Stevenson, Ciuchta, Letwin et al (2019a) within the domain of equity-based crowdfunding, we therefore employed an experimental design in order to observe causal effect of value frames on outcomes.…”

Section: Methodsmentioning

confidence: 99%

I Am What I Pledge: The Importance of Value Alignment for Mobilizing Backers in Reward-Based Crowdfunding

Nielsen

Binder

2020

Entrepreneurship Theory and Practice

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Crowdfunding has emerged as an important alternative financing tool for entrepreneurs. Extant research on the antecedents of crowdfunding success have produced divergent results. By applying the cross-disciplinary lens of strategic linguistic framing, that is, framing campaign messages in a way that is salient and that resonates with the values of the audience, we experimentally examine the role of value framing for a successful campaign outcome. Our results indicate that altruistically framed campaigns have a higher chance for funding compared to campaigns that emphasize egoistic or environmental motives, but even more importantly, that message framing needs to be aligned with the personal values of the backers. As such, our study highlights important similarities between resource mobilization in social movements and in crowdfunding.

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Out of control or right on the money? Funder self-efficacy and crowd bias in equity crowdfunding

Cited by 56 publications

References 119 publications

Predicting outcomes in crowdfunding campaigns with textual, visual, and linguistic signals

Predicting outcomes in crowdfunding campaigns with textual, visual, and linguistic signals

Core Self-Evaluations, Self-Leadership, and the Self-Serving Bias in Managerial Decision Making: A Laboratory Experiment

I Am What I Pledge: The Importance of Value Alignment for Mobilizing Backers in Reward-Based Crowdfunding

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