Hypothetical bias in equity crowdfunding

Douglas J. Cumming; Fabrice Hervé; Elodie Manthé; Armin Schwienbacher

Hypothetical bias in equity crowdfunding

Douglas J. Cumming ¹ Fabrice Hervé ² Elodie Manthé ² Armin Schwienbacher ³

1 Schulich School of Business, York University

2 CREGO - Centre de Recherche en Gestion des Organisations [Dijon]

Abstract : Young, entrepreneurial firms are particularly dependent on external investors to sustain their development. Are non-binding equity investment commitments informative? Our large sample evidence in the context of equity crowdfunding shows that only 18% of non-binding commitments made by investors in entrepreneurial firms are actually invested. The evidence is consistent with hypothetical bias. Hypothetical bias is significantly less pronounced among women, and among investors with greater social capital, proxied by education and wealth. While investment intentions are only partially reliable at the individual level, the aggregate amount of collected investment intentions is a strong predictor of campaign success. We investigate alternative reasons for retractions, such as lying and informational motives, both of which we find implausible alternatives to hypothetical bias.

Keywords : Hypothetical bias Voting Social capital Equity crowdfunding

Type de document :

Communication dans un congrès

Domaine :

Sciences de l'Homme et Société / Gestion et management

Liste complète des métadonnées

https://hal-univ-bourgogne.archives-ouvertes.fr/hal-01869448
Contributeur : Crego - Université de Bourgogne <>
Soumis le : jeudi 6 septembre 2018 - 14:52:03
Dernière modification le : lundi 8 avril 2019 - 19:01:25

Hypothetical bias in equity crowdfunding

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Hypothetical bias in equity crowdfunding

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