Entrepreneurial emotional bias from mass shootings: Evidence from Kickstarter

Publication Date

11-1-2024

Document Type

Article

Publication Title

Information and Management

Volume

61

Issue

7

DOI

10.1016/j.im.2024.104009

Abstract

This study examines the impact of emotional bias on entrepreneurial decisions in crowdfunding platforms, specifically considering the impact of mass shootings as exogenous emotional shocks. Using data from a leading crowdfunding platform, Kickstarter, paired with US mass shooting incidents, we apply a difference-in-differences approach. Our analysis shows that entrepreneurs in cities proximate to a mass shooting tend to adjust their fundraising targets downward. This adjustment subsequently increases the likelihood of campaign success, a trend that is even more pronounced for projects tied to the geographic location of the mass shooting incident. Our findings not only attest to the profound influence of emotions in crowdfunding decisions, but also unveil the nuanced, varying effects based on geographic relevance. This research underscores the importance of understanding and addressing such biases to bolster crowdfunding platform efficiency and to support the consistent success of crowdfunded enterprises.

Funding Number

NRF-2022S1A3A2A02089685

Funding Sponsor

Ministry of Education

Keywords

Crowdfunding, Emotional bias, Entrepreneurship, Mass shooting, Quasi-experiment

Department

Information Systems and Technology

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