Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267313 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 10081
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
For reward-based crowdfunding, we introduce the strategy-proof Generalized Moulin-Shenker mechanism (GMS) and compare its performance to the prevailing All-Or-Nothing mechanism (AON). Theoretically, GMS outperforms AON in equilibrium profit and funding success. We test these predictions experimentally, distinguishing between a sealed-bid and a dynamic version of GMS. We find that the dynamic GMS outperforms the sealed-bid GMS. It performs better than AON when the producer aims at maximizing funding success. For crowdfunding in practice, this implies that the current standard of financing projects could be improved upon by implementing a crowdfunding mechanism that is similar to the dynamic GMS.
Subjects: 
crowdfunding
market design
strategy-proofness
laboratory experiment
JEL: 
C92
D82
G29
Document Type: 
Working Paper
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