Signaling to the Crowd: Disclosure of Donors’ Hierarchical Virtual Badges in Charitable Crowdfunding
Xiaobing Wu, Tianshi Wu, Xitong Guo, and Hongze Yang
International Journal of Electronic Commerce,
Volume 30, Number 1, 2026, pp. 34-61.
Abstract:
Achieving project goals remains a persistent challenge in charitable crowdfunding, and while existing research has explored various positive signals to boost crowdfunding success, direct evidence on the influence of donor-related reputation signals, specifically donors’ hierarchical virtual badges (DHVB), on donor engagement, average contributions, and total funds raised remains scarce. Furthermore, the impact of the average DHVB level on project performance is multifaceted. On the one hand, it may positively influence project performance by signaling project quality. On the other hand, it may decrease project performance by triggering social comparison among donors. This study addresses this gap by examining the nuanced effects of DHVB disclosure (signal presence) and average DHVB level (signal strength) on project performance, leveraging a platform modification. The findings reveal that disclosing DHVB significantly enhances project performance; however, the relationship between the average DHVB level and project performance is found to be inverted U-shaped. Moreover, the ratio of anonymous donors weakens these effects. These results underscore the promise and pitfalls of utilizing hierarchical reputation cues in charitable crowdfunding and offer critical implications for platform designers and project organizers, as well as theoretical contributions to the understanding of reputation dynamics in charitable crowdfunding.