Internalizing the externalities of overfunding: an agent-based model approach for analyzing the market dynamics on crowdfunding platforms
- Crowdfunding platforms offer project initiators the opportunity to acquire funds from the Internet crowd and, therefore, have become a valuable alternative to traditional sources of funding. However, some processes on crowdfunding platforms cause undesirable external effects that influence the funding success of projects. In this context, we focus on the phenomenon of project overfunding. Massively overfunded projects have been discussed to overshadow other crowdfunding projects which in turn receive less funding. We propose a funding redistribution mechanism to internalize these overfunding externalities and to improve overall funding results. To evaluate this concept, we develop and deploy an agent-based model (ABM). This ABM is based on a multi-attribute decision-making approach and is suitable to simulate the dynamic funding processes on a crowdfunding platform. Our evaluation provides evidence that possible modifications of the crowdfunding mechanisms bear the chance to optimize funding results and to alleviate existing flaws.
Author: | Jascha-Alexander KochORCiDGND, Jens LausenORCiDGND, Moritz Kohlhase |
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URN: | urn:nbn:de:hebis:30:3-636874 |
DOI: | https://doi.org/10.1007/s11573-021-01045-w |
ISSN: | 1861-8928 |
Parent Title (English): | Journal of business economics |
Publisher: | Springer |
Place of publication: | Berlin ; Heidelberg |
Document Type: | Article |
Language: | English |
Date of Publication (online): | 2021/05/25 |
Date of first Publication: | 2021/05/25 |
Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
Release Date: | 2022/12/27 |
Tag: | Agent-based modeling; Crowdfunding; Internalization of externalities; Market engineering; Overfunding; Pigouvian tax |
Volume: | 91 |
Issue: | 9 |
Page Number: | 44 |
First Page: | 1387 |
Last Page: | 1430 |
Note: | Open Access funding enabled and organized by Projekt DEAL. |
Institutes: | Wirtschaftswissenschaften |
Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
JEL-Classification: | C Mathematical and Quantitative Methods / C6 Mathematical Methods and Programming / C63 Computational Techniques; Simulation Modeling (Updated!) |
D Microeconomics / D6 Welfare Economics / D61 Allocative Efficiency; Cost–Benefit Analysis | |
D Microeconomics / D6 Welfare Economics / D62 Externalities | |
Sammlungen: | Universitätspublikationen |
Licence (German): | Creative Commons - Namensnennung 4.0 |