Essays on understanding demand-side benefits in crowd-based platforms

Thesis Advisory Committee

Prof. Swanand Deodhar
Prof. Samrat Majumdar
Prof. Adrija Majumdar

Abstract

Crowd-based platforms have become increasingly popular for fulfilling financial, ideational, and expertise-based needs. Recognizing this potential, academic research has explored numerous factors influencing supply and demand dynamics on these platforms. This dissertation contributes to scholarship and practice in this domain by analyzing unique scenarios and identifying key demand-side advantages. Underlying these scenarios are interesting and dichotomous theoretical viewpoints. Addressing these gaps enhances our understanding of the phenomenon, contributes to the existing literature, and proposes solutions for the demand side.

Considering donation-based crowdfunding, the first essay examines how crises as an exigency impact prosocial behavior. Altruism logic suggests that projects from affected regions should attract more funds, while the bystander effect argues for fewer donations. Beyond this dichotomy, we explore racial determinants of funding. Our findings reveal that projects from crisis-affected regions receive lower funding, supporting the bystander effect. However, projects from regions with higher non-white populations receive better funding, given the baseline reduction. Consequently, these insights offer practical guidance for effectively managing platforms in response to external events such as disasters.

Examining reward-based crowdsourcing platforms, the second essay studies the effect of concurrent contests on solver efforts. Network effects logic suggests that more contests should attract more efforts, while resource allocation theory argues that efforts will spread thin. Using participant-level data, we find that more active contests reduce efforts. We further explore contest-level interventions of reward amount and description. A richer contest description mitigates this negative effect, while high rewards exacerbate it. These findings offer managerial implications for competition organizers and platform designers to optimize user engagement.

Focusing on equity crowdfunding, the third essay examines the role of innovativeness narrative in funding success using an entrepreneurial storytelling perspective. Based on signaling theory, this narrative can convey originality to investors but also holds the risk of appearing embellished. We further explore the role of the geographical affiliation of the venture in complementing this narrative. Our results indicate that high innovativeness reduces funding, but disclosing the venture's specific location mitigates this effect. Finally, we offer strategic insights for entrepreneurs, emphasizing the importance of location-aware narratives.