Crowdfunding: a game theory approach

Abstract

Crowdfunding has become a mainstream element in the financial environment, yet many of its dynamics have not been thoroughly explained. This dissertation proposes a game theory approach and develops a game with the aim to explain some observed behaviours in Kickstarter crowdfunding campaigns. Establishing assumptions and limitations supported by academic research, we observe investors who are ready to pledge but wait for later stages of the campaign to show their support are actually impairing the campaign’s performance by following this practice. We further theorize that in order to correctly exploit supporters emotional involvement to boost campaign success, non-monetary early stretch goals can be used properly.