When emotions become (in-) appropriate: How social-contextual factors moderate the effect of emotional expressions on investment decisions in reward-based crowdfunding

Investment decisions in reward-based crowdfunding are significantly shaped by the emotional appeal of campaign presentations. However, it remains still largely unclear how intensively emotional expressions should be used to most effectively persuade investors to fund a project. Building upon Emotion as Social Information theory, which suggests that effective emotional expressions must match social expectations and be perceived as appropriate by recipients, we studied the effect of emotional expressions in the text, pictures, and pitch videos of 16,967 Kickstarter campaigns. We found that the impact of emotional expressions on the investment decision is curvilinear across all modalities, meaning that it deteriorates or even reverses with higher intensities. We also found that this effect is moderated by the nature of the relationship between the entrepreneur and investors and by the perceived economic risk under which the investment decision is made. These factors seem to influence investors’ tolerance of more intensive emotional expressions.