Publication:
The promise of reward crowdfunding

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dc.affiliation.dptoUC3M. Departamento de Economía de la Empresaes
dc.contributor.authorGutiérrez, María
dc.contributor.authorSáez Lacave, María Isabel
dc.date.accessioned2022-07-04T16:32:18Z
dc.date.available2022-07-04T16:32:18Z
dc.date.issued2018-09
dc.description.abstractResearch Question/IssueWe study reward crowdfunding (RC), the most innovative segment of the crowdfunding market, where, instead of a debt or equity contract, fund providers are promised some good or service in the future in exchange for their contribution to the funding of the investment project under a contract that does not penalize the creator's failure to deliver. The existing economic and legal literature is puzzled by the platform's use of this seemingly inefficient contract where a standard pre-sale contract would appear to work better. Research Findings/InsightsCounterintuitively, we prove that the no-penalty contract is the optimal contract between creators of unknown talent and early adopters of their products when creators can benefit from being discovered as talented and from the goodwill generated by delivering on their promise to early adopters. Theoretical/Academic ImplicationsOur analysis contributes to understanding RC by showing that the no-penalty RC contract, far from being an inefficiency, is a contractual innovation specifically designed for talent discovery. We also contribute to the literature on relationship contracts, showing that even in a one-shot game, it is possible to sustain a contract in the desire to build a reputation that will be useful in a future contract with a third party. Practitioner/Policy ImplicationsOur analysis has important policy implications on how backers should be protected. Standard measures of consumer or investor protection may be counterproductive.en
dc.description.sponsorshipMaría Gutiérrez‐Urtiaga gratefully acknowledges the financial support from Comunidad de Madrid and the EU's European Social Fund through grant S2015/HUM‐3353 EARLYFIN‐CM and from the European Regional Development Fund through grant FEDER UNC315‐EE‐3636.en
dc.identifier.bibliographicCitationGutiérrez-Urtiaga, M., & Sáez-Lacave, M.I. (2018). The promise of reward crowdfunding. Corporate Governance: An International Review, 26, pp. 355-373en
dc.identifier.doihttps://doi.org/10.1111/corg.12252
dc.identifier.issn0964-8410
dc.identifier.publicationfirstpage355
dc.identifier.publicationlastpage373
dc.identifier.publicationtitleCORPORATE GOVERNANCE-AN INTERNATIONAL REVIEWen
dc.identifier.publicationvolume26
dc.identifier.urihttps://hdl.handle.net/10016/35392
dc.identifier.uxxiAR/0000022076
dc.language.isoeng
dc.publisherJohn Wiley & Sons, Incen
dc.relation.projectIDComunidad de Madrid. S2015/HUM-3353
dc.rights© John Wiley & Sons, Incen
dc.rights.accessRightsopen access
dc.subject.ecienciaEconomíaes
dc.subject.otherCorporate governanceen
dc.subject.otherReward crowdfundingen
dc.subject.otherBest effortsen
dc.subject.otherPresale contracten
dc.subject.otherTalent discoveryen
dc.titleThe promise of reward crowdfundingen
dc.typeresearch article*
dc.type.hasVersionAM*
dspace.entity.typePublication
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