The economics of crowdfunding platforms

- Survey of the economics of crowdfunding platforms.
- Covers theory and empirics.
- Particular focus on cross-group and within-group external effects.
- Also addresses asymmetric information problems on crowdfunding platforms.

This paper provides a description of the crowdfunding sector, considering investment-based crowdfunding platforms as well as platforms in which funders do not obtain monetary payments. It lays out key features of this quickly developing sector and explores the economic forces at play that can explain the design of these platforms. In particular, it elaborates on cross-group and within-group external effects and asymmetric information on crowdfunding platforms.