Information Design in Crowdfunding under Thresholding Policies

09/12/2017

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by   Wen Shen, et al.

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In crowdfunding, an entrepreneur often has to decide how to disclose the campaign status in order to collect as many contributions as possible. We propose information design as a tool to help the entrepreneur to improve revenue by influencing backers' beliefs. We introduce a heuristic algorithm to dynamically compute information-disclosure policies for the entrepreneur, followed by an empirical evaluation to demonstrate its competitiveness over the widely-adopted immediate-disclosure policy. Our results demonstrate that despite its ease of implementation, the immediate-disclosure policy is not optimal when backers follow thresholding policies. With appropriate heuristics, an entrepreneur can benefit from dynamic information disclosure. Our work sheds light on information design in a dynamic setting where agents make decisions using thresholding policies.