Comparing Crowdfunding Mechanisms: Introducing the Generalized Moulin-Shenker Mechanism (with Andrej Woerner, Sander Onderstal, Arthur Schram)
with Authur Schram
Hybrid event
Luxembourg Institute of Socio-Economic Research (LISER)
Maison des Sciences Humaines
11, Porte des Sciences
L-4366 Esch-sur-Alzette / Belval
Conference Room 1st floor
11:00 am
12:15 pm
For inquiries:


Crowdfunding is omnipresent. The rise of the internet and the explosion of social media have made it an important source of funds for, i.a., charities, musicians and startups. Yet, it has received remarkably little attention in the economics literature. In particular, the allocation mechanisms used by crowdfunding platforms remain understudied. We make a first step towards filling this gap by studying the performance of the prevailing All-Or-Nothing mechanism(AON). We also introduce a new, strategy-proof, crowdfunding mechanism, the Generalized Moulin-Shenker mechanism (GMS). We show that in theory GMS outperforms AON in terms of equilibrium profit and funding success. We test these theoretical predictions in a laboratory, distinguishing between a sealed-bid and a dynamic version of GMS. Our results show that the dynamic GMS performs better than the sealed-bid GMS. It outperforms AON when the producer’s objective is to maximize funding success. For crowdfunding in practice, this implies that the current standard of financing projects could be improved upon by implementing a crowdfunding mechanism that is similar to the dynamic GMS.


More about the 3E DTU

The Doctoral Training Unit (DTU) 3E - Experiments, Ethics and Economics - consists of an interdisciplinary consortium of 9 social scientists who use scientific experiments involving human subjects in their research. The objective of the consortium is to create a formal link for collaboration across the three existing social science research laboratories in Luxembourg, with the aim to push forward the state-of-the-art of what we know about human behavior in economic interactions. The DTU 3E gathers members across 5 Luxembourgish research units:

(1) Luxembourg Institute of Socio-Economic Research LISER
(2) Institute for Health and Behavior IHB (Faculty of Humanities FLSHASE, University of Luxembourg UL)
(3) Institute of Cognitive Science and Assessment COSA (FLSHASE, UL)
(4) Luxembourg School of Finance LSF (Faculty of Law, Economics and Finance FDEF, UL)
(5) Luxembourg Centre of Logistics LCL (Economics Research Centre CREA, FDEF, UL)

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