The step-level public good aspect of equity crowdfunding
A game-theoretic analysis
Bibliographic Data
| ID | 5722308 |
|---|---|
| Authors | Alex Barrachina (0000-0001-7499-0316, Universitat Jaume I, corresponding author), Eduardo Jiménez-Fernández (0000-0002-7949-9144, Universidad de Granada) |
| Year | 2025 |
| Volume | 37 |
| Issue | 3 |
| Pages | 300-337 |
| Publication date | 2025-08-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Rationality and Society (JOURNAL) |
| Journal identifiers | ISSN: 1043-4631 • E-ISSN: 1461-7358 |
| Publisher | SAGE Publications Inc (PUBLISHER) |
| DOI | 10.1177/10434631251343716 |
| OpenAlex | W4410432394 |
| Language | EN |
| References cited | 44 |
The social significance of crowdfunding has been growing during the last few years and it has become an attractive and common way to finance different kinds of projects. In the particular case of an equity crowdfunding campaign, it implies an interesting social interaction among potential contributors (the "crowd") since it can be conceptualized as the interaction in the private provision of a step-level public good whose rivalry and excludability are ruled by the equity principle. The present paper adopts this perspective to analyze for the first time the most basic rationale for the dynamics and results of such interaction applying a game-theoretic approach. The model assumes a two-period society in which a sufficiently high number of agents decide how much to contribute to an equity crowdfunding campaign seeking contributions to cover the investment needed by a project. If that target is relatively low, the collective behavior of the "crowd" results in an inefficient equilibrium, creating a reversed-social-dilemma among crowdfunders, the opposite of the social dilemma related to the common free-rider problem in the private provision of regular step-level public goods. If the target is not that low, the social interaction may lead to a multiplicity of equilibria, but in every possible equilibrium the amount collected by the campaign is exactly the needed investment
Dilemma · Economics · Excludability · Free riding · Microeconomics · Political science · Public economics · Public good · Rivalry · Social dilemma · Ultimatum game · Blockchain Technology Applications and Security · FinTech, Crowdfunding, Digital Finance · Law · Microfinance and Financial Inclusion
Participation and the provision of discrete public goods
Crowdfunding and bank financing
Provision of step‐level public goods with continuous contribution
Private provision of public goods can be efficient
Provision of Step-Level Public Goods Under Uncertainty
On Equity and Utility
Intra-Level and Inter-Level Interaction
The economics of escalation
Provision of Public Goods and the MCS Experimental Paradigm
| Highly cited | No |
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