Team rivalry and lending on crowdfunding platforms: an empirical analysis

Background Prosocial crowdfunding helps the underprivileged obtain non-profit seeking loans from multitudinous lenders. Some platforms introduce team competition to motivate member participation and may thus induce team rivalry. Methods We investigate how team rivalry affects lending decisions using data from Kiva.org. We argue that a rivalry relationship may engage teams to compete directly against rivals by lending to the same project or prevent them from doing so because they intend not to cooperate. Result We find that a team is less likely to lend to a project that has received funding from its rival team, suggesting that rival teams tend to avoid cooperation. Conclusions We discuss the implications of our findings for crowdfunding and competition-based motivation mechanisms in general.