Abstract
This study examines the impact of emotional bias on entrepreneurial decisions in crowdfunding platforms, specifically considering the impact of mass shootings as exogenous emotional shocks. Using data from a leading crowdfunding platform, Kickstarter, paired with US mass shooting incidents, we apply a difference-in-differences approach. Our analysis shows that entrepreneurs in cities proximate to a mass shooting tend to adjust their fundraising targets downward. This adjustment subsequently increases the likelihood of campaign success, a trend that is even more pronounced for projects tied to the geographic location of the mass shooting incident. Our findings not only attest to the profound influence of emotions in crowdfunding decisions, but also unveil the nuanced, varying effects based on geographic relevance. This research underscores the importance of understanding and addressing such biases to bolster crowdfunding platform efficiency and to support the consistent success of crowdfunded enterprises.
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