Secret Admirers: An Empirical Examination of Information Hiding and Contribution Dynamics in Online Crowdfunding

Abstract

Individuals’ actions in online social contexts are growing increasingly visible and traceable. Many online platforms account for this by providing users with granular control over when and how their identity or actions are made visible to peers. However, little work has sought to understand the effect that a user’s decision to conceal information might have on observing peers, who are likely to refer to that information when deciding on their own actions. We leverage a unique impression-level dataset from one of the world's largest online crowdfunding platforms, where contributors are given the option to conceal their username or contribution amount from public display, with each transaction. We demonstrate that when campaign contributors elect to conceal information, it has a negative influence on subsequent visitors’ likelihood of conversion, as well as on their average contributions, conditional on conversion. Moreover, we argue that social norms are an important driver of information concealment, providing evidence of peer influence in the decision to conceal. We discuss the implications of our results for the provision of online information hiding mechanisms, as well as the design of crowdfunding platforms and electronic markets more generally.

Keywords: crowdfunding, social norms, information hiding, peer influence, anonymity

JEL Classification: R12, Z11, L17, G21, G24