Decision Making in Crowdfunding Under Risk Analysis

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2018-01-03

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Crowdfunding is an emerging international financial activity often performed via internet mediated platform. With the rapid growth of this financial system, rising risks would influence participant’s decision making. In this study, we examine the process of a typical crowdfunding activity, pre-ordering pledging as well as its coming risks. Based on the analysis, we combine Evolutionary Stable Strategy (ESS) and General Bass Model (GBM) to build decision-making models for pre-ordering pledging theoretically where risk factors are taken into account. Finally, evolutionary game simulation system is built to simulate the dynamic decision-making behavior in a risk changing environments. The simulation results demonstrate that the currency exchange rate give great impact on international participant’s decision-making behavior in crowdfunding. Low exchange rate brings less investment decision from the investor and high exchange rate leads to overheated investment which challenges funder’s diligence. Project system risk may infest the participant’s decisions-making process and cause ambiguity at the end. Limitation and managerial suggestions are discussed.

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Multi-Criteria Decision Analysis and Support Systems, Crowdfunding; Decision-making;Risk; System Simulation

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10 pages

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Proceedings of the 51st Hawaii International Conference on System Sciences

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Attribution-NonCommercial-NoDerivatives 4.0 International

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