{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,2,20]],"date-time":"2026-02-20T04:20:18Z","timestamp":1771561218187,"version":"3.50.1"},"reference-count":32,"publisher":"Institute for Operations Research and the Management Sciences (INFORMS)","issue":"7","content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["Management Science"],"published-print":{"date-parts":[[2025,7]]},"abstract":"<jats:p> Crowdfunding can suffer from information asymmetry, leaving some investors disappointed with low-quality projects, whereas other high-quality projects remain unfunded. We show that refund bonuses, which provide investors a payment if a fundraising campaign is unsuccessful, can signal project quality and help overcome the market failure in crowdfunding. Because strong projects have a lower risk of bonus payout, entrepreneurs with strong projects are more likely to offer bonuses. This signals high quality to investors, and due to their updated beliefs, this drives investment toward such projects. An experiment provides supporting empirical evidence for the benefits of this signaling solution to the problems of information asymmetry in crowdfunding. <\/jats:p><jats:p> This paper was accepted by Joshua Gans, business strategy. <\/jats:p><jats:p> Funding: This work was supported by Schmidt Sciences. <\/jats:p><jats:p> Supplemental Material: The online appendix and data files are available at https:\/\/doi.org\/10.1287\/mnsc.2023.03923 . <\/jats:p>","DOI":"10.1287\/mnsc.2023.03923","type":"journal-article","created":{"date-parts":[[2024,10,18]],"date-time":"2024-10-18T14:41:47Z","timestamp":1729262507000},"page":"5933-5947","source":"Crossref","is-referenced-by-count":6,"title":["Signaling Quality: How Refund Bonuses Can Overcome Information Asymmetries in Crowdfunding"],"prefix":"10.1287","volume":"71","author":[{"ORCID":"https:\/\/orcid.org\/0000-0001-9581-5015","authenticated-orcid":false,"given":"Timothy N.","family":"Cason","sequence":"first","affiliation":[{"name":"Department of Economics, Purdue University, West Lafayette, Indiana 47907"}]},{"ORCID":"https:\/\/orcid.org\/0000-0003-2200-2851","authenticated-orcid":false,"given":"Alex","family":"Tabarrok","sequence":"additional","affiliation":[{"name":"Department of Economics and Center for Study of Public Choice, George Mason University, Fairfax, Virginia 22030"}]},{"ORCID":"https:\/\/orcid.org\/0000-0002-6940-5175","authenticated-orcid":false,"given":"Robertas","family":"Zubrickas","sequence":"additional","affiliation":[{"name":"Department of Economics, University of Bath, Bath BA2 7AY, United Kingdom; and Faculty of Economics and Business Administration, Vilnius University, 10105 Vilnius, Lithuania"}]}],"member":"109","reference":[{"key":"B1","doi-asserted-by":"publisher","DOI":"10.1111\/etap.12157"},{"key":"B2","doi-asserted-by":"publisher","DOI":"10.2307\/1879431"},{"key":"B3","doi-asserted-by":"publisher","DOI":"10.1016\/j.geb.2013.11.004"},{"key":"B4","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.2019.3482"},{"key":"B5","first-page":"850","volume":"75","author":"Bester H","year":"1985","journal-title":"Amer. 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