An Experiment in Crowdfunding: Assessing the Role and Impact of Transaction-Level Information Controls

Crowdfunding has received a great deal of attention of late, as a promising avenue to fostering entrepreneurship and innovation. A notable aspect of shifting these financial activities to an online setting is that this brings increased visibility and traceability to a potentially sensitive activity. Most crowdfunding platforms maintain a public record of transactions, though a good number also provide transaction-level information controls, enabling users to conceal information as they see fit. We explore the impact of these information control mechanisms on crowdfunder behavior, acknowledging possible positive (e.g., comfort) and negative (e.g., privacy priming) impacts, employing a randomized experiment at a leading crowdfunding platform. Reducing access to information controls increases conversion rates (by ~5%), yet it also decreases average contribution amounts ($5.81 decline). We offer interpretations for these effects along with some empirical support, and we discuss implications for crowdfunding platform design