Reward Crowdfunding: Who to Attract at the Beginning of the Campaign? An Analysis in Terms of Revealed Networks of Preferences

Abstract

This paper combines the theoretical teachings of revealed preferences, signal theory and weak tie theory to better understand the dynamics at work at the beginning of a campaign and to explain its success. By identifying the revealed preferences of early backers through their common past contributions, we characterize as strong or weak the nature of the complex preference ties between them. We build networks of the contributions made by the individuals identified as early backers to 9,425 campaigns run on the Ulule platform between July 2010 and September 2014. Our results underline the importance for the success of campaigns of the presence of strong preference ties between early backers and other platform users. They also corroborate the theory of the strength of weak ties. Later in the campaign, the intervention of backers with less specific preferences, in the position of intermediaries, positively influences the future outcome by accelerating fundraising speed at the beginning of the campaign.