Exploring the impact of initial herd on overfunding in equity crowdfunding

Outcome of equity crowdfunding campaigns often exceeds original fundraising goals, leading to market inefficiency. This undesirable phenomenon of overfunding garnered little attention in past studies. Synthesizing extant literature on crowdfunding and herding, we identified the initial herd made visible by funding progress indicator as the main cause of overfunding. The impact of the initial herd can be quantified by three dimensions: maturity, intensity, and persistency. We then advance and validate a research model for examining how dimensions of the initial herd affect overfunding in equity crowdfunding. Findings from this study can shed light on plausible remedies for the overfunding issue.     

A cross-platform analysis of the equity crowdfunding Italian context: the role of intellectual capital

Electronic Commerce Research - Does intellectual capital positively affect the success of the equity crowdfunding campaigns? This paper answers this question using an original dataset of 191 equity...     

An empirical investigation of signaling in reward-based crowdfunding

Start-ups often face the challenge of a shortage of capital, the so-called funding gap, which can be overcome by raising small amounts of money from a large number of individuals. As crowdfunding suffers from a continuous rise in failure rates, the aim of this article is to contribute to the research concerning success factors in reward-based crowdfunding campaigns by focusing on signaling theory. Based on data retrieved from the crowdfunding platform Kickstarter, our results indicate that social ties, investment preparation and presentation, the supply of multiple rewards as well as endeavors to communicate and interact with the crowd positively influence the probability of success of a reward-based crowdfunding campaign. In contrast, the funding goal, a campaign’s runtime and the estimated time of delivery for the rewards have a negative impact on the successful completion of a campaign.     

Dynamics and stability in optical communication networks: a system theory framework

This paper addresses the problem of dynamics analysis in optical networks from a system control perspective. A general framework for finding the transfer matrix representation of an optical network is developed, based on linear fractional transformations. Under the natural assumption of equal time-delay for all channels in a link, the network transfer matrix is simplified such that channel cross-coupling is evidenced. The optical network stability problem is then reformulated as a robust stability problem and stability conditions are developed by applying μ-analysis.     

Self-insurance of investor under repeating catastrophic risks

A decision-making problem of investment into a profitable object in a catastrophic risk area is considered. By a catastrophic risk is meant the probability of severe yet unlikely losses. As a risk hedging mechanism, an insurance fund is considered that is replenished by a part of profit and is used for object renewal. It is shown that methods of insurance mathematics can be used to assess the risk to lose the object. For the plant loss probability as a function of the insurance reserve, integral equations are derived. They can be solved by successive approximations. __________ Translated from Kibernetika i Sistemnyi Analiz, No. 3, pp. 74–83, May–June 2007.     

Feature subset selection for predicting the success of crowdfunding project campaigns

Electronic Markets - Statistics from crowdfunding platforms show that a small percent of crowdfunding projects succeed in securing funds. This makes project creators eager to know the probability...     

Applying BERT to analyze investor sentiment in stock market

Neural Computing and Applications - This paper is an analysis of investor sentiment in the stock market based on the bidirectional encoder representations from transformers (BERT) model. First, we...     

Why funders invest in crowdfunding projects: Role of trust from the dual-process perspective

While previous studies have identified several factors that influence funders’ investment behavior in crowdfunding, few have explored the underlying mechanisms, particularly the potential boundary conditions in which the effect of funders’ trust varies. This paper examines two contextual variables: project type and funding level, which moderate the relationships between key antecedents and investment decisions. The research model based on the trust theory and dual-process perspective was developed and evaluated with a web-based experiment using actual crowdfunding projects chosen from a real crowdfunding site. Our findings provide new insight into the role of trust and its antecedents in different contexts.     

双层网络效应下众筹平台上新产品扩散

基于创新扩散理论分析在由线下网络与线上网络构成的双层网络效应下,众筹支持者中充当“创新代理人”的群体如何利用簇群形成帮助众筹发起者实现新产品从早期少数采纳者到早期多数者的跨越扩散过程.同时基于传染病模型,建立众筹平台的双层网络O_SCI$_2$R模型,并运用Matlab对“创新代理人”的数量和影响力对线上/线下创新扩散的影响、“创新代理人”对簇内创新扩散的影响以及簇对线上/线下创新扩散的影响进行模拟仿真.研究结论显示:“创新代理人”数量越多,线上/线下创新扩散越快;“创新代理人”影响力越大,线上/线下创新扩散越快;“创新代理人”不仅促进了簇内的创新扩散,也扩大了簇群间的创新扩散;围绕“创新代理人”形成的簇在最初短时间内促进了线上/线下创新扩散,但并不能决定后期的创新扩散.     

Money is not everything: A typology of crowdfunding project creators

While studies focus on how crowdfunding promotes the launch of innovative products or services through two-sided (creator-investor) platforms and digital tools, knowledge on the creator-side motivation is limited. To address this knowledge gap, our study identifies four types of crowdfunding project creators—social entrepreneur, fund seeker, indie producer, and daring dreamer—based on four motivations—achievement, monetary need, prosociality, and relationship building. We also examine how crowdfunding projects’ characteristics differ by the creator type and which characteristics are critical for enhancing projects’ performance. The study extends crowdfunding literature by deepening knowledge of creator-side motivation and contributes to crowdfunding practices by suggesting platform operators ways to attract and promote different types of project creators.     

My words for your pizza: An analysis of persuasive narratives in online crowdfunding

We analyze charity requests registered on the Random Acts of Pizza online community and examine the content of postings and non-content characteristics to identify features that are associated with the success of donation. We find that the presence of rational and credible appeals in a message increases the likelihood of receiving a donation, whereas the mere presence of negative emotional appeal does not do so. Our research is useful for those who like to make persuasive charity requests on online platforms.     

The devil is in the details: The effect of nonverbal cues on crowdfunding success

Many reward-based crowdfunding platforms encourage entrepreneurs to introduce their projects and make a personal appeal with a video clip. In this study, we investigate the impact of such a pitch video on financing outcomes. Grounded in social perception literature, we propose that effective use of nonverbal cues in a pitch video increases funding success. We coded and analyzed videos of crowdfunding campaigns and found that an entrepreneur could improve the funding outcomes by gazing less, appearing early, and reducing speech hesitations in a pitch video. We also found that smiling has no impact on funding success.     

The role of multidimensional social capital in crowdfunding: A comparative study in China and US

How does an entrepreneur's social network impact crowdfunding? Based on social capital theory, we developed a research model and conducted a comparative study using objective data collected from China and the U.S. We found that an entrepreneur's social network ties, obligations to fund other entrepreneurs, and the shared meaning of the crowdfunding project between the entrepreneur and the sponsors had significant effects on crowdfunding performance in both China and the U.S. The predictive power of the three dimensions of social capital was stronger in China than it was in the U.S. Obligation also had a greater impact in China.     

Behind the scenes: The role of writing guideline design in online charitable crowdfunding market

The online charitable crowdfunding platform has emerged as a powerful tool for raising funds from large crowds to support non-profit activities. Following a patronage model, fundraisers on the platform are forced to use compelling stories to capture the attention of individual donors. As such, conceptualizing a persuasive request narrative for projects posted on the platform becomes one of the most pressing issues. Project writing guidelines, as an important platform design, are widely adopted to help fundraisers. Unfortunately, their role in the market has not been well examined. To fill this research gap, we leverage a unique dataset from a leading donation-based crowdfunding platform in the United States and make full use of its policy change opportunity on writing guidelines to thoroughly investigate its impacts and the underlying mechanism on donors’ contributions. Our empirical results show that the more constraints the guidelines impose on writing, the more likely they are to weaken the persuasiveness of narratives. We specifically focus on three aspects of narrative complexity and find that writing guidelines have a negative impact on linguistic complexity, which in turn diminishes donors’ contribution behavior. Nevertheless, they have positive impacts on both content and structural complexity, with the difference being that increased content complexity weakens donors’ contributions, while higher structural complexity is more likely to attract donations. Moreover, we examine the heterogeneous effects of writing guidelines on fundraisers with varied involvements. These findings deepen our understanding of writing guidance design in online platforms and have implications for charitable crowdfunding platforms and fundraisers.     

An investigation of enablers and inhibitors of crowdfunding adoption: Empirical evidence from startups in China

In recent years, crowdfunding has emerged as a new fundraising technique for startup ventures. Crowdfunding allows small businesses and startups to seek funding from a large number of private investors, the so‐called “crowdfunders.” Crowdfunding is beneficial for startup ventures by offering a variety of financial and nonfinancial benefits such as helping to solve funding difficulties, providing value‐added involvement, facilitating access to further funding, and providing publicity. In contrast, diffusion processes of new business innovations have become increasingly complicatedly and multifaceted in recent years. Potential users today are exposed to a wide range of influences that include word‐of‐mouth communications, network externalities, and social signals. Despite the advantages associated with crowdfunding, the crowdfunding industry faces slow rates of diffusion in the Chinese market because crowdfunding ventures often fail to translate into adoption behavior. This study investigates the enablers and inhibitors of crowdfunding adoption intention from the perspective of startups by employing the two‐factor theory, status quo bias theory, and innovation diffusion theory. These theories allow crowdfunding researchers and platform managers to test the relative influence of both reasons for (enablers) and reasons against (inhibitors) crowdfunding adoption in a single framework. In conclusion, considering the phenomenon of startups in China, the results of this study will fill the paucity of empirical research in the innovation resistance area, shedding light on the motivation of entrepreneurs to avoid crowdfunding as a financing course as well as providing crowdfunding managers and policymakers with strategic recommendations.     

Rational fads in investor reactions to electronic commerce announcements: An explanation of the Internet bubble

This work proposes that information cascade theory can help to explain the formation of the Internet bubble. We propose that the bubble existed because a lack of good information about the potential value of electronic commerce led investors to rely on other investors’ private valuations of electronic commerce. We use the event study methodology to estimate returns to company announcements of electronic commerce initiatives in 1999 and 2000. We find that after controlling for network externalities and time trends, investors’ valuations of the returns to electronic commerce initiatives were significantly influenced by the market return from prior periods. Moreover, the relative weight placed on prior periods’ returns decreased as the variance of the prior periods’ returns increased. Both of the results are consistent with the behavior predicted by information cascade theory.     

The effect of equity strategies on girls' computer usage in school

This study investigated the effect of school-based equity strategies on girl's voluntary computer usage. In the three experimental middle schools, the staff participated in a workshop on computer equity and then selected equity strategies for implementation; staff in the two control schools were not provided with equity strategies. Results indicate that with intervention girls used the computer significantly more than boys in the experimental schools, while this was not true in the control schools.     

Portfolio management system in equity market neutral using reinforcement learning

Portfolio management involves position sizing and resource allocation. Traditional and generic portfolio strategies require forecasting of future stock prices as model inputs, which is not a trivial task since those values are difficult to obtain in the real-world applications. To overcome the above limitations and provide a better solution for portfolio management, we developed a Portfolio Management System (PMS) using reinforcement learning with two neural networks (CNN and RNN). A novel reward function involving Sharpe ratios is also proposed to evaluate the performance of the developed systems. Experimental results indicate that the PMS with the Sharpe ratio reward function exhibits outstanding performance, increasing return by 39.0% and decreasing drawdown by 13.7% on average compared to the reward function of trading return. In addition, the proposed PMS_CNN model is more suitable for the construction of a reinforcement learning portfolio, but has 1.98 times more drawdown risk than the PMS_RNN. Among the conducted datasets, the PMS outperforms the benchmark strategies in TW50 and traditional stocks, but is inferior to a benchmark strategy in the financial dataset. The PMS is profitable, effective, and offers lower investment risk among almost all datasets. The novel reward function involving the Sharpe ratio enhances performance, and well supports resource-allocation for empirical stock trading.

     

Adapting and personalizing the communication in a synchronous communication tool

Abstract   In this paper, we present a synchronous text-based communication tool, referred to as Adaptive Communication Tool (ACT), which provides capabilities for adaptation and personalization. ACT supports both the free and the structured form of dialogue. The structured dialogue is implemented by two types of Scaffolding Sentence Templates (SST); i.e. sentence openers or communicative acts. The capability of adaptation is considered in the sense of making suggestions for the supported form of dialogue and SST type and providing the most meaningful and complete set of SST with respect to the learning outcomes addressed by the collaborative learning activity and the model of collaboration followed by the group members. Also, ACT enables learners to have control on the adaptation by selecting the form of dialogue and the SST type they prefer to use and enriching the provided SST set with their own ones in order to cover their communication needs. The results from the formative evaluation of the tool showed that (i) the proposed dialogue form, SST type and the provided set of SST cover students' communication needs, (ii) the capability of personalizing the communication by selecting the desired communication means as well as by enriching the provided SST set satisfied students, and (iii) students used adequately both types of SST resulting into on-task and coherent dialogues.