Reputation Hurts: The Impact of Group Reputation on Voluntary Contributions on Prosocial Crowdfunding Platforms

Online platforms that rely on voluntary user contributions face persistent challenges in maintaining sustained and active participation. This study investigates the effectiveness of a unique combination of social mechanisms—a group reputation system—in motivating individual voluntary contributions within the context of online prosocial crowdfunding. While a strong group identity can inspire member participation, the study also acknowledges a potential downside: a positive group reputation may “crowd out” individual contributions by signaling the efforts of other members. Using data collcted from Kiva, we empirically examine the impact of group reputation, measured in the form of group rankings, on both overall team contributions and individual member contributions. The findings indicate that teams with higher rankings experience a decline in subsequent contributions, supporting the idea of group reputation as a public good. Further analyses explore the mechanisms driving this negative impact, offering valuable insights into the dynamics of group reputation systems.