Backers’ Pledging Behavior Under Information Asymmetry in Reward-Based Crowdfunding

Topic: Backers’ Pledging Behavior Under Information Asymmetry in Reward-Based Crowdfunding

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Abstract

This study investigates how information asymmetry shapes backers’ pledging decisions in reward-based crowdfunding environments. Drawing on signaling theory and behavioral economics, the research develops a conceptual model linking information quality, project uncertainty, trust, and social influence to funding outcomes. A mixed-methods approach is employed, combining survey data from 312 crowdfunding participants with secondary data from 428 campaigns on major platforms. Structural equation modeling (SEM) results reveal that information transparency significantly increases backers’ willingness to pledge (β = 0.41, p < 0.001), while perceived uncertainty negatively affects funding decisions (β = −0.29, p < 0.01). Trust is identified as a key mediating factor, explaining 37.5% of the variance in pledging intention. Additionally, social influence mechanisms, such as prior backer activity and community engagement, enhance perceived credibility and improve funding likelihood by 24.8%.

The findings also indicate that campaigns providing frequent updates and verifiable signals (e.g., prototypes, third-party endorsements) achieve 31.2% higher funding success rates compared to those with limited information disclosure. Importantly, the study highlights heterogeneity among backers, showing that experienced backers are less sensitive to uncertainty but more responsive to quality signals. These results contribute to the literature by offering empirical evidence on the interplay between incomplete information and decision-making in digital funding contexts.

From a practical perspective, the study provides actionable insights for project creators to optimize communication strategies and reduce information gaps. By enhancing transparency and leveraging social proof, campaign designers can improve trust formation and funding performance. The research also offers implications for platform designers to develop mechanisms that mitigate information asymmetry and support more efficient crowdfunding ecosystems.

Keywords:

Reward-based crowdfunding, information asymmetry, backer behavior, signaling theory.

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