Crowdfunding

Crowdfunding is a novel and increasingly popular means to finance cultural projects. Crowdfunding calls are often used to appeal to the general public and collect funding for prospective cultural projects, and thus to raise revenues before the full costs of creation are incurred. Crowdfunding platforms on the Internet were first devised for cultural projects. To date the practice has found many other applications, and crowdfunding platforms have raised billions of US dollars. This chapter introduces typical aspects of crowdfunding, surveys important variants and platforms, and it discusses the state of empirical research. This chapter also develops an analysis of crowdfunding based on core elements of cultural economics – including experience good attributes, socially interdependent demand formation, public good attributes and intrinsic motivation to participate in creative projects. While it is hard to predict the future import of crowdfunding, the phenomenon is fascinating because it constitutes an innovation from the cultural sector that has already had broad applications in many other aspects of the economy.