Crowdfunding and too much choice: A recipe for disappointment

Abstract

In this study, we investigate the effects of reward options and their prices on crowdfunding success. Rational economics predicts that the more choice potential contributors have, the more likely it is that they find a reward option that stimulates participation. However, experiments in behavioral economics and marketing show that providing someone with excessive choice (overchoice) might adversely affect participation. Using data collected from Kickstarter, a well-known crowdfunding website, we demonstrate the existence of the overchoice phenomenon in the context of crowdfunding, i.e., an inverted U-shaped relationship between reward options and crowdfunding performance.