Confidence is Good? too Much, not so Much: Exploring the effects on crowdfunding success

Abstract

Marketers take major risks to display confidence, based on the assumption that “more is always better”, yet the extant literature lacks adequate support for this notion. The present research proposes a novel conceptualization of the relationship between the confidence expressed in crowdfunding project descriptions and success, which is predicted to take an inverted U-shape. In this regard, the research draws upon the compensation effect identified between perceived competence and warmth, such that expressing high levels of confidence could decrease perceived warmth. As a result, there will be an optimal (moderate) level of confidence that determines successful fundraising outcomes – as measured by the number of contributors and amounts contributed. This prediction is tested by analyzing more than 71,000 Kickstarter projects (Study 1) and 1.3 million Kiva projects (Study 2, preregistered). A follow-up experiment (Study 3, preregistered) then establishes causality, demonstrating the role of perceived warmth and competence as the underlying mechanism.