Strategic Online Information Disclosure in Crowdfunding

In crowdfunding, a project creator maximizes revenue by jointly optimizing information disclosure and pricing strategies for contributors who arrive stochastically. Such a joint optimization problem is challenging to solve due to its online nature and intertwined strategies. Nevertheless, we propose an online algorithm (with low computational complexity <tex xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">$\mathcal{O}\left(N_{\textit{max}}^{2}\right)$</tex>) to address the problem in two steps. First, we show that it is optimal for the creator to charge the same price between two consecutive information disclosure instances. Second, we prove that a creator only needs to consider whether to disclose information immediately after a contributor arrives. We show that the creator increases the price as the campaign processes, which is consistent with the common observation. Our mechanism numerically outperforms the popular information disclosure policy used by leading platforms like Kickstarter and Indiegogo, yielding an average revenue gain of 150%.