4.6 Article

Operational Transparency on Crowdfunding Platforms: Effect on Donations for Emergency Response

期刊

PRODUCTION AND OPERATIONS MANAGEMENT
卷 28, 期 7, 页码 1773-1791

出版社

WILEY
DOI: 10.1111/poms.13014

关键词

operational transparency; crowdfunding; donations; emergency response

资金

  1. Swiss National Science Foundation [P1TIP1_171887, P1TIP1_178664]
  2. Kelley School of Business at Indiana University
  3. Swiss National Science Foundation (SNF) [P1TIP1_171887, P1TIP1_178664] Funding Source: Swiss National Science Foundation (SNF)

向作者/读者索取更多资源

Online crowdfunding has emerged as a powerful tool to raise funds for emergency response. Crowdfunding campaigns can use two transparency tools to attract donors: updates and certification. Updates are additional messages that the organizer issues after launching the campaign and are a form of operational transparency when they communicate the campaign's work to donors. Alternatively, certification is a form of conventional transparency that ensures the campaign truly benefits a charitable purpose. Using an econometric analysis, we investigate the effects of transparency on donations. We study the direction of causality and mechanisms behind work-related updates by conducting an experiment. Results from the econometric analysis using over 100,000 campaigns benefiting victims of emergencies reveal that both updates and certification have positive effects on donations. Each additional work-related word in an update (operational transparency) increases donations on average by $65 per month, while certification (conventional transparency) raises funds on average by $22 per month. Results from the experiment confirm the direction of causality; posting work-related updates in crowdfunding campaigns increases donations. Two mechanisms explain this effect: donors' enhanced perceptions of effort and perceptions of trust.

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