Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/274822 
Year of Publication: 
2022
Citation: 
[Journal:] Journal of Risk and Financial Management [ISSN:] 1911-8074 [Volume:] 15 [Issue:] 7 [Article No.:] 300 [Year:] 2022 [Pages:] 1-26
Publisher: 
MDPI, Basel
Abstract: 
Rewards-based crowdfunding (RBC) has recently gained popularity as an alternative means of finance to help entrepreneurs bring novel projects to life. We theorize that crowdfunding backers perceive an implicit psychological contract with campaign creators. When promised rewards fail to materialize post fundraising, backers may perceive entrepreneurs' failure to deliver rewards as a violation of their psychological contract with him or her. Drawing on psychological contract theory and using Eisenhardt's comparative case methodology, we generate insights about crowd reactions to creators' failure to deliver rewards to backers. Our research generates the novel insight that in the event of delivery failure, backers who perceive a transactional psychological contract with creators are more likely to display negative emotional reactions, while backers who perceive a relational psychological contract are more likely to display positive emotional reactions. Furthermore, we identify three progressive stages of backers' interaction with creators in failed RBC campaigns, 'committing', 'crisis handling', and 'coping-up' and highlight the crowds' emotional valence associated with each stage. Our analyses of the campaign comments reveal insights of interest to RBC players and hold implications for the future development of crowdfunding.
Subjects: 
crowdfunding
emotional valence
entrepreneurial failure
failure to deliver rewards
Kickstarter.com
psychological contract theory
rewards-based crowdfunding
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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