Crowdfunding: Default and Market Failure
Date Issued
2014
Date
2014
Author(s)
Weng, Li-Ren
Abstract
This paper aims to find out the mechanism to prevent fraud of crowdfunding. In a crowdfunding activity, because the cost of state verification is higher than the value of investment, no investor wants to do state verification. A model developed to explain the decision making process of investors and project initiators of a crowdfunding project. Without state verification, the higher the value of private interests of the project initiator, the lower the possibility of fraud. When a third party does state verification for a crowdfunding project, there is no fraud. In this case, the value of private interests is negatively related to investors’ expected return due to decrease of expected default recovery.
Subjects
群眾募資
信用風險
違約
詐欺
Type
thesis
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ntu-103-R01723004-1.pdf
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