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Abstract

Using Kickstarter and Indiegogo, the two largest crowdfunding platforms, we conduct an exhaustive search of all fraud cases from 2010 through 2015 that spans nine countries. In line with traditional economic theory, we posit that crowdfunding fraudsters are most concerned with getting caught and with the extent of the expected punishment. However, human nature suggests that maintaining a positive self-concept may be of equal concern. In line with this hypothesis, we present evidence that fraudsters are becoming more recognizable on portals and to the crowd because of several specific characteristics: They are less likely to carry out repeat funding campaigns, they are less likely to have a social media presence, and they are more likely to provide poorly worded and confusing campaign pitches with a greater number of enticements through pledge categories.