Journal article
Herding in equity crowdfunding
- Abstract:
- We build a model of equity crowdfunding that incorporates the two major funding models: all‐or‐nothing (AoN) and keep‐it‐all (KIA). Both informed and uninformed investors arrive sequentially and rationally choose whether and how much to invest. The KIA solution turns out to be a reduced version of AoN without signalling. We test predictions using data from a leading European equity crowdfunding platform and find support. Results are consistent with rational information aggregation. However, negative information cascades may still appear. The AoN crowdfunding mechanism might therefore fail to finance a nonnegligible percentage of positive NPV projects.
- Publication status:
- Published
- Peer review status:
- Peer reviewed
Actions
Access Document
- Files:
-
-
(Preview, Version of Record, Version of record, pdf, 1.2MB, Terms of use)
-
- Publisher copy:
- 10.1111/1756-2171.12474
Authors
- Publisher:
- Wiley
- Journal:
- The RAND Journal of Economics More from this journal
- Publication date:
- 2024-09-14
- DOI:
- EISSN:
-
1756-2171
- ISSN:
-
0741-6261, 1756-2171
- Language:
-
English
- Keywords:
- Pubs id:
-
831210
- Local pid:
-
pubs:831210
- Source identifiers:
-
2261616
- Deposit date:
-
2024-09-15
- ARK identifier:
This ORA record was generated from metadata provided by an external service. It has not been edited by the ORA Team.
Terms of use
- Copyright date:
- 2024
If you are the owner of this record, you can report an update to it here: Report update to this record