Seminar (Dept. of Finance)

Theme：Trust in Crowdfunding: Experimental Evidence from a Fund-raising Campaign

Speaker：Jun Yang, Conrad Prebys Professor of Finance, Kelley School of Business, Indiana University

Time：2021-09-24 09:00

Address：Zoom Meeting

Language：English

Venue：Zoom Meeting

https://zoom.com.cn/j/87264818339?pwd=RGlqbC9nNmozQ1pRZFV3TS9qSE1KZz09

Meeting ID：872 6481 8339

Password：177530

ABSTRACT:

Despite the importance of trust on economic outcomes, little is known about the determinants of interpersonal trust. In this paper, we examine the role of trust and the types of characteristics that are associated with the perception of trustworthiness in the context of crowdfunding, using a randomized field experiment with the donors of a fund-raising campaign. The key feature of the campaign involves random rotation of various versions of the campaign page which differ in the profile photo, details of campaign description, and update status. These versions generate different levels of perceived trustworthiness, which are then independently judged by a pool of Amazon mTurk participants. We first find that while posting updates to the campaign significantly increases perceived trustworthiness and amount raised, showing a more detailed description has little impact. Interestingly, having a white male profile picture receives a higher trustworthiness score and generates a higher contribution level, which can be (partly) explained by white and male participants’ biases. Finally, we find that the above relationship disappears when the donors are directly connected to the founding team, highlighting the certification and trust-transmitting role of social networks.

SHORT BIOGRAPHY:

Jun Yang is a Director of the Institute for Corporate Governance and Professor of Finance at Kelley School of Business, Indiana University. Her research focuses on corporate finance, corporate governance, executive compensation, and FinTech.

Jun’s work on opportunistic managerial behavior in compensation peer benchmarking practice was published by the Journal of Financial Economics (JFE) and Review of Financial Studies. Jun’s current research investigates opportunistic managerial behavior related to executive pensions and various factors that may affect the nature of director independence (e.g., collusive trading between independent directors and the CEO, and corporate charitable donations to independent-director-affiliated charities). Her most recent publication at the JFE shows that in some circumstances managers are able to extract rents through their pension plans. Top executives receive one-time increases in pensionable earnings through higher annual bonuses one year before a plan freeze and one year before retirement. Firms also boost pension payouts by lowering plan discount rates when top executives are eligible to retire with lump-sum benefit distributions.

Winning numerous research awards, Jun's work was featured by The Wall Street Journal, New York Times, The Washington Post, Bloomberg, Harvard Law School Forum, and Slate. Jun received her Ph.D. in Finance from Washington University in Saint Louis, and her Master’s and Bachelor’s degrees from Tsinghua University (summa cum laude).