Crowdfunding: An Industrial Organization Perspective

The first objective of the paper is to identifiy a number of issues related to crowdfunding that are worth studying from an industrial organization (IO) perspective. To this end, we first propose a definition of crowdfunding; next, on the basis on a previous empirical study, we isolate what we believe are the main features of crowdfunding; finally, we point to a number of strands of the literature that could be used to study the various features of crowdfunding. The second objective of the paper is to propose some preliminary efforts towards the modelization of crowdfunding. In a first model, we associate crowdfunding with pre-ordering and price discrimination, and we study the conditions under which crowdfunding is preferred to traditional forms of external funding. In a second model, we see crowdfunding as a way to make a product better known by the consumers and we give some theoretical underpinning for the empirical finding that non-profit organizations tend to be more successful in using crowdfunding. JEL classification codes: G32, L11, L13, L15, L21, L31