(An) empirical study of blockbuster effects on online crowdfunding

Abstract

Crowdfunding has emerged alongside the IT development. It is widely believed that overwhelmingly successful projects, called "blockbuster" projects, would have significant impacts on the overall crowdfunding platform. In theoretical perspectives, there have been two countervailing effects of blockbuster, cannibalization effects and spill-over effects. However, in previous studies, there are notable limitations. First, we consider how the advent of blockbusters impact according to the projects’ similarity with inside and outside clusters, rather than the pre-determined categories. Second, we examine the blockbusters’ heterogeneity with the type of backers that bring different effects. Therefore, we expect to fill in the gaps of prior literatures which concluded that the blockbuster project has the same effects on all the other projects within same categories. Our study uses unique data set, compiled by Python based self-developed crawler and apply novel clustering method to analyze blockbuster effects. The dataset includes 148,398 projects and 2,915,821 records of daily pledged amount. We find empirical evidence that blockbusters have a spillover effect on same categories, especially inside clusters experience larger effects than outside clusters. In the long run, these spillover effects last long for the inside cluster, but decay faster in outside clusters. Furthermore, this result changes according to the composition of backers. As a major contribution of this paper, we obtain market structure insights from the creator generated contents based on the semantic network analysis to assess the degree to which the latent competition causes cannibalize or spill-over effects inside the same category. Our study presents a promising avenue for the application of semantic network analysis to the crowdfunding context.