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Pitching with your heart (on your sleeve): Getting to the heart of how display authenticity matters in crowdfunding
Abstract
It is known that people can distinguish authentic from inauthentic emotional displays. It is also known that emotions are generally impactful in crowdfunding pitches. Yet, the potential lynchpin-like role that displays of authentic emotion may play in funding pitches has been overlooked in entrepreneurial resource acquisition research. More importantly, research on authenticity has not uncovered the mechanisms through which display authenticity positively affects observers’ responses. Our work fills this gap by developing a theoretical model that explains the underlying processes of entrepreneurs’ display authenticity and success in crowdfunding. Consistent with the predictions of the emotions as social information model, results from a field study and an experiment reveal the mediating roles of inferential and affective processes. Furthermore, our findings provide evidence for the moderating role of funders’ epistemic motivation on performance. We find that, depending on path, these effects take different directions.
... Aligning learning goals and outcomes can lead either to an adjustment of goals or learning strategies, ultimately changing the way of learning (Winkler et al., 2021, p. 17). Oo and Allison (2022), in their research made the case that display authenticity is an influential yet largely unstudied influence in entrepreneurial funding pitches. Oo and Allison (2022) found that displayed authenticity helps entrepreneurs raise money through crowdfunding. ...
... Oo and Allison (2022), in their research made the case that display authenticity is an influential yet largely unstudied influence in entrepreneurial funding pitches. Oo and Allison (2022) found that displayed authenticity helps entrepreneurs raise money through crowdfunding. Oo and Allison posited that, "given the importance of emotional expression in crowdfunding, display authenticity is likely a dominant influence on whether emotional expression helps or hurts and thus whether entrepreneurs get the money they need to start and grow their ventures" (Oo & Allison, 2022, p. 31). ...
This study explores and understands the impact of remote teaching using digitised teaching-learning virtual platforms on students’ learning objectives and outcomes in Ghanaian Universities. Using a self-administered questionnaire, quantitative data from four hundred and four graduate students whose courses were delivered online due to the COVID-19 pandemic were gathered. Data were analysed using a systemic analytical approach. Confirmatory factor analysis was conducted first, followed by an analysis of moment structures for multiple levels of variables using structural equation modelling. It was found that students’ trust in the quality of information they received online, their interactions with instructors, and their interactions with virtual platforms positively affected their trust in the usability of digitised ‘teaching-learning’ virtual platforms; this had a positive impact on their attainment of learning objectives. In conclusion, students’ perceptions of the usability of virtual platforms as classrooms for teaching and learning are influenced by a psychological dynamic between the quality of information they receive from their instructors and the quality of their interactions with instructors and the virtual platforms. The findings offer a good pedagogic understanding of the dynamics of virtual teaching-learning design practices, which may be applied to effectively design virtual classrooms and assignments to improve student learning.
... We relied on Prolific to obtain responses in a two-step process. Prolific is a commonly used online portal comparable to other platforms such as Amazon MTurk or Qualtrics, which are extensively used for academic studies (e.g., Barber III et al., 2022;Oo & Allison, 2022;Su et al., 2022). It assists researchers in their data collection, as Prolific provides a wide pool of registered participants who can be recruited. ...
This study provides understanding as to how creative entrepreneurs’ thinking processes affect their entrepreneurial decision-making, and the influencing role played by their emotions. Using a cross-sectional design, quantitative data were collected from 576 creative entrepreneurs and analyzed descriptively and inferentially. It was found that creative entrepreneurs’ thinking processes affect their entrepreneurial decision-making. Their emotions were also found to strongly negatively affect their entrepreneurial decision-making. It was concluded that in understanding how the thinking processes of creative entrepreneurs inform their entrepreneurial decision-making, their emotional orientations, which strongly determine the character of their entrepreneurial decision-making, must be considered. The results of this study provide a good understanding of the dynamics of creative entrepreneurs’ thinking processes and their entrepreneurial decision-making and the mediating influence of their emotions, which could be used to effectively design creative entrepreneurship skills and practices toward improved entrepreneurial decision-making.
The voice is often the only continuous channel of expression in pitch videos. We isolate the influence of entrepreneurs' vocal expressions on funding by examining how valence (positivity/negativity) and arousal (activation) shape funders' perceptions of passion and preparedness. We show that an entrepreneur's high-arousal vocal expressions, whether positive or negative, increase perceptions of their passion. Entrepreneurs are perceived as more prepared when the valence and arousal of their vocal expressions are congruent. We test our hypotheses in the context of rewards-based crowdfunding, using both an experiment and a speech affect analysis of real-world crowdfunding pitches.
Crowdfunded microlending research implies that both communal and agentic characteristics are valued. These characteristics, however, are often viewed as being at odds with one another due to their association with gender stereotypes. Drawing upon expectancy violation theory and research on gender stereotypes, we theorize that gender-counterstereotypical facial expressions of emotion provide a means for entrepreneurs to project “missing” agentic or communal characteristics. Leveraging computer-aided facial expression analysis to analyze entrepreneur photographs from 43,210 microloan appeals, we show that women benefit from stereotypically masculine facial expressions of anger and disgust, whereas men benefit from stereotypically feminine facial expressions of sadness and happiness.
Numerous studies have shown that facial expressions influence trait impressions in the Western context. There are cultural differences in the perception and recognition rules of different intensities of happy expressions, and researchers have only explored the influence of the intensity of happy expressions on a few facial traits (warmth, trustworthiness, and competence). Therefore, we examined the effect of different intensities of Chinese happy expressions on the social perception of faces from 11 traits, namely trustworthiness, responsibility, attractiveness, sociability, confidence, intelligence, aggressiveness, dominance, competence, warmth, and tenacity. In this study, participants were asked to view a series of photographs of faces with high-intensity or low-intensity happy expressions and rate the 11 traits on a 7-point Likert scale (1 = “not very ××,” 7 = “very ××”). The results indicated that high-intensity happy expression had higher-rated scores for sociability and warmth but lower scores for dominance, aggressiveness, intelligence, and competence than the low-intensity happy expression; there was no significant difference in the rated scores for trustworthiness, attractiveness, responsibility, confidence, and tenacity between the high-intensity and low-intensity happy expressions. These results suggested that, compared to the low-intensity happy expression, the high-intensity happy expression will enhance the perceptual outcome of the traits related to approachability, reduce the perceptual outcome of traits related to capability, and have no significant effect on trustworthiness, attractiveness, responsibility, confidence, and tenacity.
Scant attention has been paid to the differences in fundraising for social versus commercial ventures. We adopt a role congruity theory perspective to argue that because women and people of color are more congruent with role expectations attributed to social entrepreneurs, they experience better fundraising performance when raising crowdfunded capital for social ventures compared to commercial ventures. We then argue entrepreneur race heightens fundraising differences for men and women. Results indicate women experience better funding performance when funding a social versus commercial venture—an effect that is larger for women of color. Men of color experience worse performance when funding a social venture. We find no differences for White men.
Crowdfunding has emerged as an alternative means of financing new ventures by utilizing the financial support of a large group of individual investors. In this research, we ask a novel question: does being crowdfunded carry any signal value for the broader market of observing consumers? Seven studies reveal a consumer preference for “crowdfunded products”, even after controlling for a product’s objective product characteristics. We identify two inferences that help explain this effect: (1) consumers perceive crowdfunded products to be of higher quality, and (2) they believe that supporting crowdfunding reduces inequality in the marketplace. We further document an important boundary condition of the first inference: our identified effect reverses in high risk domains (e.g., products that involve high physical risk), due to consumer perceptions that the crowdfunding model lacks sufficient professionalism to mitigate risk. With regard to the second inference, we find that the positive crowdfunding effect is particularly strong among consumers who value social equality. Taken together, our work sheds new light on consumer perceptions of crowdfunding, elucidates why and when consumers prefer crowdfunded products, and offers actionable implications for managers.
We build upon theory from evolutionary psychology and emotional expression, including basic emotion theory and the dual threshold model of anger in organizations, to extend knowledge about the influence of facial expressions of emotion in entrepreneurial fundraising. First, we conduct a qualitative analysis to understand the objects of entrepreneurs' facial expressions of four basic emotions in their pitches: happiness, anger, fear, and sadness. This provides a base for our theorizing that the frequency of entrepreneurs' facial expression of each of these emotions exhibits an inverted U-shaped relationship with funding. We also argue that the frequency of changes in entrepreneurs' facial expressions is positively related to funding. We test our predictions with a sample of 489 funding pitches using computer-aided facial expression analysis. Results support inverted U-shaped relationships of the frequency of facial expression of happiness, anger, and fear with funding, but show a negative relationship of sadness with funding. Results further support that the frequency of change in entrepreneurs' facial expressions promotes funding.
Studies of gender in entrepreneurship acknowledge that gender norms are at the root of women’s disadvantage in resource‐acquisition but provide limited guidance on how societal (macro‐level) norms and their gendering influence entrepreneurs’ micro‐level behaviors and stakeholders’ decisions within local contexts. To address this lacuna, we draw on gender theory and French Pragmatist Sociology (FPS) to offer G‐FPS: an analytical and methodological framework of resource‐claiming as a process of justifying, engaging and testing, embedded in normative context that constructs gender roles and social worth. Through analysis of a historical case of business resource‐acquisition in pre‐state Israel, we theorize and demonstrate how local gendered norms steered men and women to diverge in their justifications and self‐presentation when making their claims, and how stakeholders evaluated those claims according to their fit with situated gender expectations. We thus illustrate how macro‐level gender norms infiltrate and operate within micro‐level processing, persistently favoring men over women.
Crowdfunding entrepreneurs increasingly use videos to present their venture and themselves to potential investors. To do this effectively, they consciously or unconsciously use several impression management techniques. Based on human and automated (AI-based analysis) of technology-related videos, we determine which impression management techniques help crowdfunding creators to attract a higher number of backers and meet their financial targets. Our results indicate that self-presentation and exemplification techniques are positively associated with crowdfunding success, while intimidation is negatively related to crowdfunding success. Our findings show that automated analysis of videos using advanced AI can replace human coding since measures based on human coding become insignificant when AI-based measures are included in the analysis. This illustrates the insights companies can create through the large scale automated analysis of video content using AI, including outside of a crowdfunding context.
The use of Amazon’s Mechanical Turk (MTurk) in management research has increased over 2,117% in recent years, from 6 papers in 2012 to 133 in 2019. Among scholars, though, there is a mixture of excitement about the practical and logistical benefits of using MTurk and skepticism about the validity of the data. Given that the practice is rapidly increasing but scholarly opinions diverge, the Journal of Management commissioned this review and consideration of best practices. We hope the recommendations provided here will serve as a catalyst for more robust, reproducible, and trustworthy MTurk-based research in management and related fields.
In this study, the authors examine the effects of two facets of employee emotions on customers’ assessments of service encounters. Drawing on emotional contagion and emotional labor theories, they investigate the influence of the extent of service employees’ display of positive emotions and the authenticity of their emotional labor display on customers’ emotional states and, subsequently, on customers’ assessments of the service interaction and their relationship with the service provider. To test the study hypotheses, 223 consumers participated in a simulated service encounter in which actors played the roles of service employees. In a 2 × 2 factorial design, the employees varied both the extent of their smiling behavior and their emotional labor display by engaging in surface or deep acting. The results show that the authenticity of employees’ emotional labor display directly affects customers’ emotional states. However, contrary to expectations, the extent of employee smiling does not influence customer emotions, providing no support for the existence of primitive emotional contagion in service interactions. Furthermore, employee emotions exert an influence on customer outcomes that are of interest to marketers.
Despite growing managerial interest in frontline employee behavior, and in display authenticity specifically, customers’ heterogeneous reactions to authentic displays have received little scholarly attention. Drawing on emotion as social information theory, we investigate the role of motivational orientations (i.e., regulatory focus) in customer reactions to authentic displays. The findings show that inauthentic displays have stronger negative effects on service performance for prevention-focused than for promotion-focused customers. A dyadic field study details these effects in terms of tipping, and three experiments provide further evidence by experimentally manipulating authenticity and regulatory focus. The conditional effect of authenticity on service performance also is mediated by inferred deception. Specifically, prevention-focused customers interpret inauthentic emotion displays as more deceptive than promotion-focused customers do. Managers should prime customers’ promotion focus using marketing communications before the service delivery when inauthentic displays are likely as well as consider customers’ regulatory focus when designing authenticity training for employees.
Building on the insights from observational learning and other social influence research, this study challenges the existing literature that proposes a linear relationship between prior funding and subsequent contributions in the crowdfunding setting. Instead, we propose a U-shaped relationship, illustrating a negative relationship between prior funding and subsequent contributions when funding amounts are small and this relationship becomes positive when prior funding amounts are large. Consistent with the rational herding perspective, we assume that individuals do not mindlessly mimic one others' behaviors, but incorporate quality signals into their decision-making. Signals indicating a high quality project such as video quality, as well as the preparedness and passion of the entrepreneur enhance this U-shaped relationship whereas indicators of situational urgency weaken this relationship. Based on a sample of 11,019 daily observations of 333 Kickstarter projects, we find general support for our hypotheses. Our post hoc experiment further supports the mechanisms underlying the U-shaped relationship. This paper extends our understanding of the relationship between past actions and subsequent behavior, and contributes to the literatures of observational learning, crowdfunding, and visual information.
Executive summary
We challenge the extant literature that has proposed, but inconsistently documented, a positive effect of prior funding on subsequent crowdfunding contributions. We argue that such inconsistency is due to the lack of integration of insights from other social influence research, such as observational learning, threshold models, and bystander effects. This research has been limited when postulating that crowdfunding backers simply imitate others' actions in order to mitigate uncertainty producing a linear effect, yet such an effect depends on the intensity of others' actions and may be curvilinear. This research overlooks the fact that backers do not merely passively imitate others' behaviors, but incorporate quality signals sent by entrepreneurs to make such decisions. Thus, it is important to account for potential moderators that may influence the complex relationship between prior funding and subsequent contributions.
Based on observational learning research and related models, accrued prior funding may be perceived differently by potential backers: individuals may view accrued funding as a sign of a decreased funding need on the part of a campaign's creators, because others are already backing the campaign or, alternatively, they may see it as a cue of high product quality. These conflicting effects may lead to a U-shaped relationship between prior funding and subsequent contributions at a collective level. At low funding levels, prior funding may be negatively associated with subsequent contributions because such levels indicate there is already support, but that the campaign may not be of high quality. At medium levels, prior funding may have no effect on contributions, aside from halfhearted interest of other backers. At high levels, prior funding may be positively related to subsequent contributions as this sends a robust cue of project quality and convinces prospective donors to contribute. Further, we derive a U-shaped relationship which may be moderated by visual media-based quality signals and situational urgency.
To test these hypotheses, we conducted two studies. One was a field study of 333 Kickstarter projects, with 11,019 daily observations of crowdfunding activities from mid-February 2013 through mid-April 2013. We used the Kicktraq website to track Kickstarter projects and recruited 390 participants via Amazon Mechanical Turk (MTurk) to evaluate the video pitches on Kickstarter. Our results suggest a negative relationship between prior funding and subsequent contributions when funding amounts are small. This relationship becomes positive when prior funding amounts are large. Thus, we find a U-shaped relationship between prior funding and subsequent contributions, with an inflection point when prior funding amounts reach between 72% and 80% of the funding goal. This is strengthened in the presence of visual media-based quality signals, such as video quality, as well as the preparedness and passion of the entrepreneur. However, indicators of situational urgency may weaken this U-shaped relationship.
We followed up with a post hoc experiment to document the two mechanisms by which prior funding influence subsequent contributions. We found that increases in the prior funding amount increased perceived product quality but decreased perceived urgency. These perceptions were found to jointly influence participants' proposed pledged amounts, supporting an explanation of a complex relationship between prior funding and subsequent contributions.
This study is among the first to offer a more complete picture of the relationship between past actions and subsequent behavior under market and institutional constraints (i.e., when market actors observe the censored behaviors of other actors on crowdfunding platforms) and contributes to the literatures of observational learning, crowdfunding, and visual information.
Different types of crowdfunding backers adopt various social and economic roles, beyond just financial support. Yet the most appropriate message strategy for attracting these different types of backers remains unclear. To fill this gap, using insights into advertising appeals and the elaboration likelihood model (ELM), we propose a conceptual framework reflecting how the emphasis of the appeals in a crowdfunding message might influence support decisions by two types of backers: consumers and investors. Objective data from a crowdfunding website reveal that appeals that emphasize information (emotion) exert more positive persuasive effects on consumer (investment) backers than on investment (consumer) backers. When devising the appeal emphasis, entrepreneurs thus must make a trade-off while also considering contingent factors such as decision control, social orientation, and reward tangibility. The practical implications of these findings suggest that entrepreneurs should activate backers’ information processing routes differentially, using distinct appeal emphases, rather than relying on an undifferentiated message strategy.
Entrepreneurship research on prosocial motivation has outlined its positive impact on well-being, but still little is known about its overwhelming power, which under certain conditions may have deleterious personal consequences. In this study, we question whether prosocial motivation can harm entrepreneurs' subjective well-being when they run a commercial venture. Embedded within a contingency perspective informed by self-determination theory, we build on longitudinal survey data to explain the effect of prosocial motivation on an entrepreneur's overall life satisfaction. Our analysis demonstrates that prosocial motivation has a negative effect on the entrepreneur's life satisfaction caused by increased levels of stress. However, our findings show that the negative effect of prosocial motivation dissipates when perceived autonomy at work is high compared to when it is low. Overall, our research raises questions on the role of prosocial motivation for entrepreneurs' subjective well-being, and in particular discusses its potential "dark side" in the context of commercial entrepreneurship.
This study examines the performance of user entrepreneurs in acquiring financial resources via crowdfunding. User entrepreneurs are thought to have better performance than non-user entrepreneurs, but the theoretical underpinnings of these differences are unclear. We propose a baseline hypothesis that claims of user entrepreneurship serve as a signal of capability and commitment to potential backers. In addition, building on three distinct identities of user entrepreneurs, we argue that user entrepreneurs' perceived passion, product innovativeness, and need similarity with potential backers mediate the relationship between user entrepreneurship and crowdfunding performance. Our results from a field study using a sample of crowdfunded ventures support these assertions. We validate these results and measures using both survey and experimental methods. This is one of the first studies to develop a multi-theoretical framework for user entrepreneurship, and the first to provide an underlying theoretical explanation for the superior crowdfunding performance of user entrepreneurs.
We extend the entrepreneurship literature to include positive psychological capital-an individual or organization's level of psychological resources consisting of hope, optimism, resilience , and confidence-as a salient signal in crowdfunding. We draw from the costless signaling literature to argue that positive psychological capital language usage enhances crowdfunding performance. We examine 1726 crowdfunding campaigns from Kickstarter, finding that entrepreneurs conveying positive psychological capital experience superior fundraising performance. Human capital moderates this relationship while social capital does not, suggesting that costly signals may, at times, enhance the influence of costless signals. Post hoc analyses suggest findings generalize across crowdfunding types, but not to IPOs.
This paper presents a first-ever empirical examination of the effectiveness of signals that entrepreneurs use to induce (small) investors to commit financial resources in an equity crowdfunding context. We examine the impact of venture quality (human capital, social (alliance) capital, and intellectual capital) and uncertainty on fundraising success. Our data highlight that retaining equity and providing more detailed information about risks can be interpreted as effective signals and can therefore strongly impact the probability of funding success. Social capital and intellectual capital, by contrast, have little or no impact on funding success. We discuss the implications of our results for theory, future research and practice.
This study draws upon the elaboration likelihood model of persuasion (ELM) to develop and test a model of persuasive influence in crowdfunding. To test our hypothesized relationships, we drew upon a sample of 383 ventures taken directly from Kickstarter, coupled with a decision experiment conducted in a simulated crowdfunding context. Results suggest that issue-relevant information, such as entrepreneurs' education, matters most when funders possess greater ability and motivation to make careful evaluations. In contrast, cues, such as adopting a group identity, have their strongest influence among inexperienced, first-time funders, and when requested funding amounts are smaller.
Increasingly, frontiers between business and philanthropy seem to be blurred. Reward-Based Crowdfunding platforms contribute to this blurring of lines since they propose funders to support both for-profit and philanthropic projects. Our empirical paper explores the case of Ulule, the leading crowdfunding platform in Europe. Our results, based on a statistical analysis of more than 3000 projects, show that crowdfunding platforms foster specific kinds of relationships relying on reciprocal giving, beyond the usual opposition between altruistic and selfish motivations. We use the work of Marcel Mauss to account for this process of reciprocal giving, and we argue that Maussian theory of gift can be used more generally to describe funding activities in the context of early stage entrepreneurship.
Despite increased interest in examining the factors that influence crowdfunding success, the effects of community context have been relatively unexamined. We address this void by examining the role of cultural context in crowdfunding success. Our unique data set of crowdfunding projects to “save the local theater” are homogenous in their goal, allowing us to test whether crowdfunding campaigns in certain communities lead to better funding outcomes than others. Theoretically, our results suggest the need for further integration of community and cultural constructs into models of venture funding, as such variables may have more relevance than previously believed.
Angel investors often make investment decisions based on motivational cues communicated during pitches – including enthusiasm, preparedness, and commitment – to evaluate potentially important qualities of entrepreneurs. We tested the independent and interaction effects of these cues by having 72 angels complete 1,995 evaluations of 133 live pitches. We found a positive effect of preparedness on angel evaluations, an effect enhanced by one form of commitment. The relationship between enthusiasm and evaluations of funding potential varies depending on the type of commitment considered. Our findings suggest that enthusiasm, preparedness, and commitment should be treated as conceptually and empirically distinct.v
Research generally suggests that, relative to commercial entrepreneurs, social entrepreneurs stand at a disadvantage at acquiring resources through traditional financial institutions. Yet interest in social entrepreneurship appears to be at an all-time high. The current paper advances the argument that an innovative institutional form - crowdfunding - has emerged to address the needs of social entrepreneurs and other entrepreneurs with limited access to traditional sources of capital. To examine this, we study whether and how a sustainability orientation affects entrepreneurs' ability to acquire financial resources through crowdfunding and hypothesize that a venture's sustainability orientation will enhance its fundraising capability. We also suggest that project legitimacy and creativity mediate the relationship between a sustainability orientation and funding success. Our analysis produces two key findings: 1) a sustainability orientation positively affects funding success of crowdfunding projects, and 2) this relationship is partially mediated by project creativity and third party endorsements. © 2016 John Wiley & Sons Ltd and Society for the Advancement of Management Studies.
Rater bias is a substantial sourer of error in psychological research. Bias distorts observed effect sizes beyond the expected level of attenuation due to intrarater error, and the impact of bias is not accurately estimated using conventional methods of correction for attenuation. Using a model based on multivariate generalizability theory, this article illustrates how bias affects research results. The model identifies 4 types of bias that may affect findings in research using observer ratings, including the biases traditionally termed leniency and halo errors. The impact of bias depends on which of 4 classes of rating design is used, and formulas are derived for correcting observed effect sizes for attenuation (due to bias variance) and inflation (due to bias covariance) in each of these classes. The rater bias model suggests procedures for researchers seeking to minimize adverse impact of bias on study findings.
Despite a long-standing interest in the intrapersonal role of affect in persuasion, the interpersonal effects of emotions on persuasion remain poorly understood—how do one person’s emotional expressions shape others’ attitudes? Drawing on emotions as social information (EASI) theory (Van Kleef, 2009), we hypothesized that people use the emotional expressions of others to inform their own attitudes, but only when they are sufficiently motivated and able to process those expressions. Five experiments support these ideas. Participants reported more positive attitudes about various topics after seeing a source’s sad (rather than happy) expressions when topics were negatively framed (e.g., abandoning bobsleighing from the Olympics). Conversely, participants reported more positive attitudes after seeing happy (rather than sad) expressions when topics were positively framed (e.g., introducing kitesurfing at the Olympics). This suggests that participants used the source’s emotional expressions as information when forming their own attitudes. Supporting this interpretation, effects were mitigated when participants’ information processing was undermined by cognitive load or was chronically low. Moreover, a source’s anger expressions engendered negative attitude change when directed at the attitude object and positive change when directed at the recipient’s attitude. Effects occurred regardless of whether emotional expressions were manipulated through written words, pictures of facial expressions, film clips containing both facial and vocal emotional expressions, or emoticons. The findings support EASI theory and indicate that emotional expressions are a powerful source of social influence.
This paper identifies technologically reflective individuals and demonstrates their ability to develop innovations that benefit society. Technological reflectiveness (TR) is the tendency to think about the societal impact of an innovation, and those who display this capability in public are individuals who participate in online idea competitions focused on technical solutions for social problems (such as General Electric's eco-challenge, the James Dyson Award, and the BOSCH Technology Horizon Award). However, technologically reflective individuals also reflect in private settings (e.g., when reading news updates), thus requiring a scale to identify them. This paper describes the systematic development of an easy-to-administer multi-item scale to measure an individual's level of TR. Applying the TR scale in an empirical study on a health monitoring system confirmed that individuals' degree of TR relates positively to their ability to generate (1) more new product features and uses, (2) features with higher levels of societal impact, and (3) features that are more elaborated. This scale allows firms seeking to implement co-creation in their new product development (NPD) process and sustainable solutions to identify such individuals. Thus, this paper indicates that companies wishing to introduce new technological products with a positive societal impact may profit from involving technologically reflective individuals in the NPD process.
Purpose – Paper aims is to describe, analyze and to increase the knowledge of the emerging crowdfunding phenomenon. This can be defined as the practice of funding a project or venture by raising a lot of small quantities of money from a huge number of people. Even though the number of academic studies has been increasing, the coverage of the population is relatively weak and not well understood by entrepreneurs and individual investors. Design/Methodology/Findings-The research can be classified as an exploratory research. It focuses on how the crowdfunding works. The research addresses the following research questions: What is crodwfunding? Which are the main characteristics of this phenomenon? Wihic are the principal strengths and the main weaknesses of crowdfunding? The findings expose purposes, characteristics, roles and tasks, and investment size of crowd-funding activity. Practical implications-The findings have implications for service managers interested in managing crowd-funding initiatives and to improve the activity of the consumers. Originality/value-The paper analyses a new emergent phenomenon. It aims to define the user/costuemr's role from co-creation to investment.
Crowdfunding allows founders of for-profit, artistic, and cultural ventures to fund their efforts by drawing on relatively small contributions from a relatively large number of individuals using the internet, without standard financial intermediaries. Drawing on a dataset of over 48,500 projects with combined funding over $237 M, this paper offers a description of the underlying dynamics of success and failure among crowdfunded ventures. It suggests that personal networks and underlying project quality are associated with the success of crowdfunding efforts, and that geography is related to both the type of projects proposed and successful fundraising. Finally, I find that the vast majority of founders seem to fulfill their obligations to funders, but that over 75% deliver products later than expected, with the degree of delay predicted by the level and amount of funding a project receives. These results offer insight into the emerging phenomenon of crowdfunding, and also shed light more generally on the ways that the actions of founders may affect their ability to receive entrepreneurial financing.
Catastrophic events challenge the resilience of society and require entrepreneurs to act proactively. Government COVID-19 responses forced thousands of businesses to close, resulting in a staggering loss of revenue for small businesses. Many small business entrepreneurs turned to crowdfunding to make public funding appeals. Through the lens of the identifiable victim effect, we examine how donations to affected businesses are related to language-based cues of personality traits embedded in appeals. Using the IBM Watson Personality Insights algorithm, we assess charitable appeals for language-based cues that convey entrepreneurs’ Big Five personality traits. We test our model using 6,803 donation-based campaigns between March and May 2020. We further tested how crisis salience influenced prosocial behavior, discovering that donation effects were increased for appeals that highlighted the pandemic’s impact on the business. Our results suggest that language-based cues of personality traits have significant associations with public support when embedded in charitable appeals.
Research on financial resource acquisition has indicated negative consequences for entrepreneurs that act feminine when trying to attract investors. Yet, does this remain true in crowdfunding, where there is a more diverse population of backers? To explore this, we take a gender role congruity perspective to see if gender roles align with crowdfunding success. More specifically, 2,071 entrepreneurs from Kickstarter were rated based on feminine (agreeableness and humility) and masculine (assertiveness and emotional stability) characteristics, and these characteristics were compared to whether or not the entrepreneur met the campaign goal. The results suggest that gender role congruity is a factor for successful crowdfunding, in that, for the most part, female entrepreneurs are rewarded for being more feminine and male entrepreneurs are rewarded for being more masculine. Only assertiveness was expected for both male and female entrepreneurs. Theoretical and practical implications are discussed from these findings.
Service firms invest much to ensure authentic and positive emotion displays from frontline employees. And yet, inauthentic positive displays (fake smiles) remain common, and at times, employees even show authentic negative displays (e.g., anger), thereby compromising service performance. Customer reactions to such unwanted emotion displays are heterogeneous, so managers need to know when possible negative effects on service performance are more or less strong. The literature on customer reactions to inauthentic displays is inconclusive and focuses on the moment of service delivery. We shine light on how predelivery choice confidence shapes customer reactions to inauthentic positive displays and demonstrate that customers’ high confidence in their service provider choice mitigates the negative effects of display inauthenticity. We present evidence in terms of tipping in a field study and replicate this interaction effect in three experiments. A serial mediation by cognitive dissonance and decision regret explains the conditional effect of inauthenticity. We also contrast inauthentic positive displays with authentic negative displays. The latter yield the worst service performance, unmitigated by choice confidence. We provide recommendations on how to ensure authentic positive displays (e.g., recruitment, resources, and rewards), taking into account circumstances that affect choice confidence and market shocks (e.g., the COVID-19 pandemic).
Crowdfunding has emerged as an alternative means of financing new ventures wherein a large number of individuals collectively back a project. This research specifically looks at reward-based crowdfunding, where those who take part in the crowdfunding process receive the new product for which funding is sought in return for their financial support. This work illustrates that consumers make fundamentally different decisions when considering contributing their money to crowdfund versus purchase a product. Six studies demonstrate that compared to a traditional purchase, crowdfunding more strongly activates an interdependent mindset and, as a result, increases consumer demand for social-good products (i.e., products with positive social and/or environmental impact). The research further highlights that an active involvement in the crowdfunding process is necessary to increase demand for social-good products: When a previously crowdfunded product is already to market, the effect is eliminated. Finally, it is demonstrated that crowdfunding participants exhibit an increased demand for social-good products only when collective efficacy (i.e., one’s belief in the collective’s ability to bring about change) is high.
Reward-based crowdfunding provides a unique instrument to acquire capital from small investors for a specific project. To successfully campaign for the desired funds, however, entrepreneurs also need to understand the subconscious factors, which influence the funding behavior of potential investors. In pursuit of that goal, this study examines how facial emotional expressions, which are shown in the pictures of project presentations, affect the funding decision. Building upon the emotional contagion theory and evaluating the emotions displayed on the pictures of 18,696 project webpages with a machine-learning algorithm, we show that facial expressions of happiness and sadness positively affect (i.e., encourage) the funding decision. Other than in venture capital markets, an emotional approach of potential investors might hence be a viable strategy in reward-based crowdfunding. As persuasion tool, emotions should nevertheless be used judiciously since we found high intensities of facial emotional expressions to negatively affect the funding decision.
In this manuscript, we investigate the central role of perceived frontline service employee (FSE) authenticity and the process by which it impacts purchase intentions, taking into account the represented brand's authenticity. While brand authenticity has previously been shown to enhance consumer outcomes, we find that FSE authenticity is a separate significant predictor of purchase intentions. Further, we find that FSE authenticity enhances purchase intentions by increasing perceived trust and perceived quality. However, this finding only holds for brands that do not emphasize their authenticity, indicating that brand managers should differentially emphasize FSE authenticity based on their brand's positioning. Furthermore, we investigate the robustness of these effects across both experience and credence services, and find that FSE authenticity is especially important in credence service contexts.
The present research complements extant perspectives of resourcefulness, which assert that resourceful behaviors arise out of responses to environmental constraints, by developing a model illustrating that entrepreneurs self-impose constraints on resource acquisition and deployment for differing reasons. Specifically, we introduce a novel conceptualization of frugality and differentiate it from self-control to develop a set of hypotheses that frugality predicts resource use behaviors based on long-held preferences (e.g., effectuation and bricolage) and self-control predicts resource use behaviors based on known end states or goals (e.g., causation and pre-commitments). After accumulating evidence of reliability and validity for a new measure of frugality contextualized for entrepreneurship research, the results support our self-regulatory theoretical framework. Our study contributes to research on resourcefulness by making multiple theoretical insights, and we outline numerous future research opportunities for applying the construct of frugality to explain entrepreneurial behavior.
We examine investor stereotypes and implicit bias in crowdfunding decisions. Prior research in formal venture capital settings demonstrates that investors tend to have a funding bias against women. However, in crowdfunding-wherein a 'crowd' of amateur investors make relatively small investments in new companies-our empirical observations reveal a funding advantage for women. We explain the causal mechanism underlying this counterintuitive finding by drawing upon stereotype content theory and testing a dual path moderated-mediation model. Based on archival data and a follow-up experiment, our findings suggest common gender biases held by amateur investors function to increase female stereotype perceptions in the form of trustworthiness judgments, which subsequently increases investors' willingness to invest in early-stage women-led ventures. We discuss our results with specific attention to how our findings extend the entrepreneurship funding literature as well as the gender dynamics literature in entrepreneurship and organization research more broadly.
“Service with a smile” improves performance ratings, but it is unclear whether that smile must always be authentic. We propose that reactions to a service employee’s display authenticity may depend on the customer’s race, due to a history of differential service experiences. Further, we propose that these experiences inform customers’ expectations, such that White customers are more likely than Black customers to expect friendly “service with a smile.” To test this conjecture, we first confirm that Blacks have lower service performance expectations than Whites due to a history of mistreatment in a service context. In two experimental studies and a field study, we then show that authenticity is a stronger predictor of performance-based evaluations (i.e., exceeded expectations) for White customers than for Black customers. Our findings underscore the impact of the racially biased treatment that Black customers have come to expect and the challenge of pleasing a diverse customer base.
We adopt a recently introduced incentivized method to elicit widely shared beliefs concerning (a) social norms, (b) environmental effect, and (c) difficulty of a wide range of environmental behaviors. We establish that these characteristics, as reflected in elicited beliefs recorded in one sample, predict (out-of-sample) environmental behaviors in a second separate sample. Pro-environmental behaviors perceived to be more socially appropriate and easier to perform, in particular, are more likely to be chosen. We show that subjective social norms mediate the effect of “global” (widely shared) social norms on behavior, which improves our understanding of the normative processes underlying pro-environmental action. Our use of an incentivized elicitation method might moreover mitigate problems associated with conventional surveys, such as social desirability bias, consistency bias, and inattentive responding, as discussed in the article.
Crowdfunding is an emerging phenomenon that enables entrepreneurs to solicit financial contributions for new projects from mass audiences. Drawing on the elaboration likelihood model of persuasion and emotional contagion theory, the authors examined the importance of displayed entrepreneurial passion when seeking resources in a crowdfunding context. They proposed that entrepreneurs’ displayed passion in the introductory video for a crowdfunding project increases viewers’ experienced enthusiasm about the project (i.e., passion contagion), which then prompts them to contribute financially and to share campaign information via social-media channels. Such sharing further facilitates campaign success. In addition, the authors proposed that perceived project innovativeness strengthens the positive effect of displayed passion on social-media exposure and the funding amount a project garners. They first tested their hypotheses in 2 studies using a combination of survey and archival data from the world’s 2 most popular crowdfunding platforms: Indiegogo (Study 1) and Kickstarter (Study 2). They then conducted an experiment (Study 3) to validate the proposed passion contagion process, and the effect of displayed entrepreneurial passion at the individual level. Findings from these 3 studies significantly supported their hypotheses. The authors discuss the theoretical and practical implications of their findings.
This study draws upon affective events theory, research regarding funders' perceptions, and research regarding expectation alignment between products and their presenters to develop and test an indirect effects model of crowdfunding resource allocation decisions. To test our hypothesized relationships, we drew upon a sample of 102 participants who each assessed ten different product pitches made by ten different entrepreneurs. Results from the study indicate that perceived product creativity is positively related to crowdfunding performance, both directly and indirectly, via positive affective reactions of prospective funders. Moreover, we find the indirect effect of product creativity is contingent upon the extent to which funders perceive an entrepreneur to be passionate, such that perceived entrepreneurial passion increases the positive nature of the indirect effect. Implications for future theory development, empirical research and implications for practitioners are discussed as well.
Despite the increasing relevance of online social interactions on platforms, there is still little research on the temporal dynamics between electronic word-of-mouth (a form of opinion-based social interaction), popularity information (a form of action-based social interaction), and consumer decision-making. Drawing on a panel dataset of more than 23,300 crowdfunding campaigns from Indiegogo, we investigate the dynamic effects of these social interactions on consumers’ funding decisions using the panel vector autoregressive methodology. Our analysis shows that both electronic word-of-mouth and popularity information are critical influencing mechanisms in crowdfunding. However, our overarching finding is that electronic word-of-mouth surrounding crowdfunding campaigns on Indiegogo or Facebook has a significant yet substantially weaker predictive power than popularity information. We also find that whereas popularity information has a more immediate effect on consumers’ funding behavior, its effectiveness decays rather quickly, while the impact of electronic word-of-mouth recedes more slowly. This study contributes to the extant literature by (1) providing a more nuanced understanding of the dynamic effects of opinion-based and action-based social interactions, (2) unraveling both within-platform and cross-platform dynamics, and (3) showing that social interactions are perceived as quality indicators on crowdfunding platforms that help consumers reduce risks associated with their investment decisions. The key practical implication is that a more nuanced understanding of the dynamic impact of social interactions within and across platforms can help platform providers and complementors to stimulate contribution behavior and increase platform prosperity overall.
Employees' positive affective displays have been widely used as a strategic tool to enhance service experience and strengthen customer relationships. Companies have primarily focused their employee training programs on two dimensions of display: intensity and authenticity. Yet there is limited research on when, how, and why these two dimensions affect customer reactions. Drawing on the emotions as social information (EASI) framework (Van Kleef, 2009), we develop a conceptual model in which display intensity and display authenticity differentially influence customer loyalty by changing customers' affective reactions and cognitive appraisals. Further, we propose that the relative impact of either dimension depends on customers' motivation to understand the environment deeply and accurately (i.e., their epistemic motivation). We tested our model in one field study and one laboratory study. Results across these two studies provide consistent support for the proposed model and advance our understanding about how different dimensions of employees' positive affective displays enhance customer reactions. Thus, findings of this research contribute to knowledge on the interpersonal effects of emotions in customer-employee interactions.
We examine the trade-offs associated with using Amazon.com's Mechanical Turk (MTurk) interface for subject recruitment. We first describe MTurk and its promise as a vehicle for performing low-cost and easy-to-field experiments. We then assess the internal and external validity of experiments performed using MTurk, employing a framework that can be used to evaluate other subject pools. We first investigate the characteristics of samples drawn from the MTurk population. We show that respondents recruited in this manner are often more representative of the U.S. population than in-person convenience samples-the modal sample in published experimental political science-but less representative than subjects in Internet-based panels or national probability samples. Finally, we replicate important published experimental work using MTurk samples. © The Author 2012. Published by Oxford University Press on behalf of the Society for Political Methodology. All rights reserved.
The nascent crowdfunding literature has highlighted the existence of a self-reinforcing pattern whereby contributions received in the early days of a campaign accelerate its success. After discussing what sustains this pattern, we maintain that the internal social capital that proponents may develop inside the crowdfunding community provides crucial assistance in igniting a self-reinforcing mechanism. Results of an econometric analysis of a sample of 669 Kickstarter projects are consistent with this view. Moreover, the effect of internal social capital on the success of a campaign is fully mediated by the capital and backers collected in the campaign's early days.