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The Round Number Heuristic and Entrepreneur Crowdfunding Performance

Speaker: Tse-Chun Lin
Speaker Intro:

Professor of Finance, The University of Hong Kong

Upload/File/2019/4/201904120238418.pdf

 

Host: Xiaoran Ni
Description:

We study the implications of the round number heuristic for goal amounts set by entrepreneurs in crowdfunding campaigns. We ?nd that the goal amounts of reward-based crowdfunding campaigns on Kickstarter exhibit clear clustering at round num-bers. More importantly, the use of round goal amounts is associated with a signi?cantly lower likelihood of campaign success and generally adverse campaign performance for the entrepreneurs. Our results also show that the use of round numbers in prior cam-paigns has predictive power over subsequent campaign success, suggesting that the round number heuristic conveys information about entrepreneur quality. Finally, we ?nd that the likelihood of setting a round goal amount decreases with entrepreneurial experience in crowdfunding, indicating an improved entrepreneur quality via learning by doing.

Time: 2019-04-16(Tuesday)16:40-18:00
Venue: N302, Econ Building