Abstract:

Through theoretical analysis， some significant conclusions are obtained. First， the presence of imitative competition will reduce the crowdfunding price and advertisement level under the independent advertising mode， but interestingly， it may increase the creator’s crowdfunding amount. Second， the cooperative advertising mode will induce the crowdfunding platform to increase the advertising level when the community benefit or the similarity of imitation product is relatively low. Moreover， when the platform’s advertisement is effective， cooperative advertising will simultaneously increase the creator’s crowdfunding amount and profit， the platform’s profit as well as the imitator’s profit. Under the cooperative advertising mode， crowdfunding platforms should set commission levels reasonably and improve the effectiveness of advertising actively to alleviate market competition and achieve win-win results for all parties.With the emergence of Kickstarter， Indiegogo and other crowdfunding platforms， reward-based crowdfunding has become an important form of fundraising that allows new set-ups and small firms to raise money for new product development. To improve the success rate of crowdfunding， creators usually invest in advertising to convey product information and raise consumer awareness， but such investment often inadvertently attract imitators to enter the market. Therefore， in the face of imitative competition， effective allocation of limited initial funds and the choice of advertising mode （independent advertising vs. cooperative advertising） are crucial decisions for crowdfunding creators. It focuses on the pricing and advertising strategies for reward-based crowdfunding projects in the face of imitative competition. An innovative enterprise is considered with limited initial funds that raises money through reward-based crowdfunding for the development of a new product. To improve the success rate of crowdfunding， the creator invests a certain proportion of initial funds for advertising at the beginning of the crowdfunding campaign. If the crowdfunding campaign succeeds， the imitator will also enter the regular market to compete with the creator. By developing a two-stage dynamic game model， the optimal pricing and advertising decisions under the two advertising modes （independent advertising vs. cooperative advertising） are analyzed， respectively. Through comparative analysis， the impacts of imitative competition on crowdfunding decisions are obtained， and the optimal advertising strategies under various situations are derived.

Key words: reward-based crowdfunding, advertising, imitative competition, crowdfunding platform, cooperative advertising