Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/110184
Authors: 
Deutsch, Joseph
Epstein, Gil S.
Nir, Alon
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 8955
Abstract: 
We analyze voluntary private contributions to public goods and the role seed money plays in signaling the public good's quality to potential subsequent contributors. We present a theoretical model and analyze two sets of naturally occurring data from crowd-funding platforms. After developing the theoretical background we find statistically significant switch points which distinguish between seed contributions to subsequent contributions. A positive change in contribution behavior after the switch suggests an increase in the perceived value of the public good. We find that the signal comprises the number of contributors and the average contribution (as proportion of targeted goal).
Subjects: 
public goods
voluntary private provision
crowd-funding platform
seed money
JEL: 
H4
H42
H8
D8
Document Type: 
Working Paper

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