Product and Pricing Decisions in Crowdfunding

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journal

70 Scopus Citations
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Author(s)

Detail(s)

Original languageEnglish
Pages (from-to)331-345
Journal / PublicationMarketing Science
Volume34
Issue number3
Online published28 Jan 2015
Publication statusPublished - May 2015
Externally publishedYes

Abstract

This paper studies the optimal product and pricing decisions in a crowdfunding mechanism by which a project between a creator and many buyers will be realized only if the total funds committed by the buyers reach a specified goal. When the buyers are sufficiently heterogeneous in their product valuations, the creator should offer a line of products with different levels of product quality. Compared to the traditional situation where orders are placed and fulfilled individually, with the crowdfunding mechanism, a product line is more likely than a single product to be optimal and the quality gap between products is smaller. This paper also shows the effect of the crowdfunding mechanism on pricing dynamics over time. Together, these results underscore the substantial influence of the emerging crowdfunding mechanisms on common marketing decisions.

Research Area(s)

  • crowdfunding, product line design, price discrimination, PUBLIC-GOODS, LINE DESIGN, WARM-GLOW, SEGMENTATION, MECHANISMS, DONATIONS, MARKETS, MODEL, WANT, PAY

Citation Format(s)

Product and Pricing Decisions in Crowdfunding. / Hu, Ming; Li, Xi; Shi, Mengze.

In: Marketing Science, Vol. 34, No. 3, 05.2015, p. 331-345.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journal