Request For Research Presentations For the PrivacyCon Conference #00009

Submission Number:
00009
Commenter:
Gordon Burtch
State:
Minnesota
Initiative Name:
Request For Research Presentations For the PrivacyCon Conference
This work, which examines consumer responses to privacy features on a leading crowdfunding site via a randomized experiment, was published in the journal Management Science in Jan of 2015. It will also soon be republished in the Journal of Financial Perspectives. The abstract follows, below. The paper is presently available here, on the Management Science website: http://pubsonline.informs.org/doi/abs/10.1287/mnsc.2014.2069 and here, on SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2479577 ==== Online crowdfunding has received a great deal of attention as a promising avenue to fostering entrepreneurship and innovation. Because online settings bring increased visibility and traceability of transactions, many crowdfunding platforms provide mechanisms that enable a campaign contributor to conceal his or her identity or contribution amount from peers. We study the impact of these information (privacy) control mechanisms on crowdfunder behavior. Employing a randomized experiment at one of the world's largest online crowdfunding platforms, we find evidence of both positive (e.g., comfort) and negative (e.g., privacy priming) causal effects. We find that reducing access to information controls induces a net increase in fund-raising, yet this outcome results from two competing influences-treatment increases willingness to engage with the platform (a 4.9% increase in the probability of contribution) and simultaneously decreases the average contribution (a $5.81 decline). This decline derives from a publicity effect, wherein contributors respond to a lack of privacy by tempering extreme contributions. We unravel the causal mechanisms that drive the results and discuss the implications of our findings for the design of online platforms.