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Game crowdfunding: One way to increase the effectiveness of your pitch

How can you improve your chances of generating more support for projects posted on crowdfunding sites like Kickstarter and Indiegogo. In short, research my colleague and I conducted suggests "be more positive."

The recent success of Double Fine and InXile on Kickstarter has elevated the conversation surrounding crowdfunding over the past year from a interesting dinner conversation to a relevant source of financing for would-be-game development projects. Crowdfundingc includes financing projects through donations on platforms like Kickstarter and Indiegogo as well as peer-to-peer lending networks where lenders pool resources and cut out the traditional middlemen such as banks or credit unions to offer borrowers loans. The first platform to offer these "peer-to-peer" loans was Prosper.

An important question being asked by game developers is "how can I improve my chances of generating more support for my project posted on crowdfunding sites?" I believe a study my co-author, Dr. Michael Ciuchta, and I conducted can offer one insight into this complex question: be more positive.

Impression Management Research
Individuals form impressions when they engage socially with others. This sounds simple, but one can often forget how quickly judgments are made of others especially when we as children many of us are taught "don't judge a book by its cover." Despite this advice, most data suggest that we do just that ALL THE TIME. For example, physically attractive individuals receive higher evaluations by interviewers (Barrick et al., 2009; Tsai et al., 2005), are more likely to be recommended to be hired (Cable & Judge, 1997), achieve higher educational attainment (Judge et al., 2009) and make more money (Hamermesh & Biddle, 2004; Judge et al., 2009). Even children cannot escape the "halo" effect of attractiveness--attractive children are treated more favorably by adults than their less attractive peers (Langlois et al., 2000).

The reliable and robust effect of attractiveness persists because these judgments require very little attention and are almost immediately apparent in social interactions. What's more, you and I may make these judgments without even knowing it through a process called "priming." Priming operates below our conscious awareness through the incidental activation of mental representations by environmental stimuli (Bargh et al., 1996). Dr. Robert Baron and his colleagues examined the direct link between the attractiveness of an entrepreneur and how investors perceive their ideas. They found that attractive individuals generate more positive moods in investors and the positive moods then caused higher evaluations of the entrepreneurs' ideas (Baron et al., 2006).

The same priming mechanism that operates through physical attractiveness can also operate through how people communicate. Barrick and colleagues (2009), in addition to examining attractiveness, also looked at the role of how interviewees talked on interviwer ratings. Turns out, it wasn't necessarily what people said, but how they said it that mattered. Even the mere exposure to positive words can be enough to induce a positive mood in a reader. Recent neuroimaging research offers evidence that simply looking at positive words activates regions of the brain associated with being in a positive mood (Hamann & Mao, 2002). Priming studies have long used words to activate attitudes (Srull & Wyer, 1979), stereotypes (Bargh et al., 1996), and even goals (Stajkovic et al., 2006). In a 2008 study, Henry found a positive relationship between positive word use in earnings press releases and abnormal stock returns.

Study Overview
My colleague and I were interested in determining if positive words might also influence crowdfunding interactions. We examined 729 loan requests from www.prosper.com. Each of the would-be-borrowers described their need for the loan with a short description and also posted a picture with their loan request. In addition, they provided credit information that you might expect to influence a lenders decision (i.e. credit grade, interest rate to pay on the loan, debt-to-income ratio, etc.).

To determine the attractiveness of the borrower, we asked 8 graduate students (3 male, 5 female) to assess all 729 photographs using a five ponit scale used in previous studies of attractiveness. The average score yielded a reliable measure of attractiveness, ICC (3, 8) of .92 (Shrout & Fleiss, 1979). We used the Linguistic Inquiry and Word Count (LIWC) software application version 1.06 (Pennebaker et al, 2007) to determine the proportion of positive words used in each loan description.

The average loan request of our sample was $5,157. To analyze our date, we used a survival analysis (Singer & Willett, 2003) which has two important advantages to other methods. Most notably, survival analysis allowed us to take advantage of all the information embedded in the 729 loan requests before they become "censored," or drop out of the study because the loan is withdrawn or not funded as of the end of the listing period, information not captured by alternative analytic approaches (Hosmer & Lemeshow, 1999).

Results
Would-be-borrowers with better credit grades and offering higher interest rates to lenders increased the likelihood of obtaining a loan. Turns out, the attractiveness of the person in the photograph attached to the loan request did not influence a borrower's ability to obtain a loan. It may be that attractiveness operates differently online than it does in face-to-face interactions.

Importantly, our analyses suggest that increasing the proportion of positive words does influence the likelihood of a borrower obtaining a loan. A 1% increase in the proportion of positive words used increased the likelihood of obtaining a loan by 10.5% in our sample. Another way to think about it is that from a mean level of 11 positive words, using 2 more positive words would increase the likelihood of obtaining a loan by almost 11%. 

Conclusion
So, the next time you consider posting a project on Indiegogo, Kickstarter, or trying to raise capital through a peer-to-peer lending network like Prosper, you may want to consider not just what you write, but how you write. The pen may be mightier than the sword, especially when the pen (or keyboard) generates a higher proportion of positive words for the reader.

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Bargh, J., Chen, M., & Burrows, L. 1996. Automaticity of social behavior: Direct effects of trait construct and stereotype activation on action. Journal of Personality and Social Psychology, 71: 230-244.

Baron, R., Markman, G., & Bollinger, M. 2006. Exporting social psychology: Effects of attractiveness on perceptions of entrepreneurs, their ideas for new products, and their financial success. Journal of Applied Social Psychology, 36(2): 467-492.

Barrick, M., Shaffer, J., & DeGrassi, S. 2009. What you see may not be what you get: relationships among self-presentation tactics and ratings of interview and job performance. The Journal of applied psychology, 94(6): 1394.

Cable, D., & Judge, T. 1997. Interviewers' perceptions of person-organization fit and organizational selection decisions. Journal of Applied Psychology, 82(4): 546-561.

Hamann, S., & Mao, H. 2002. Positive and negative emotional verbal stimuli elicit activity in the left amygdala. Neuroreport, 13(1): 15.

Henry, E. 2008. Are investors influenced by how earnings press releases are written? Journal of Business Communication, 45(4): 363.

Hosmer, D. W., & Lemeshow, S. 1999. Applied Survival Analysis. New York: John Wiley & Sons.

Judge, T., Hurst, C., & Simon, L. 2009. Does it pay to be smart, attractive, or confident (or all three)? Relationships among general mental ability, physical attractiveness, core self-evaluations, and income. The Journal of applied psychology, 94(3): 742.

Langlois, J., Kalakanis, L., Rubenstein, A., Larson, A., Hallam, M., & Smoot, M. 2000. Maxims or myths of beauty? A meta-analytic and theoretical review. Psychological Bulletin, 126(3): 390-423.

Pennebaker, J., Chung, C., Ireland, M., Gonzales, A., & Booth, R. 2007. The Development and Psychometric Properties of LIWC2007. 1-22. Austin, Texas 78703 USA.

Shrout, P. E., & Fleiss, J. L. 1979. Intraclass correlations: uses in assessing rater reliability. Psychological Bulletin, 86(2): 420-428.

Singer, J., & Willett, J. 2003. Applied Longitudinal Data Analysis: Modeling Change and Event Occurrence: Oxford University Press, USA.

Srull, T., & Wyer, R. 1979. The role of category accessibility in the interpretation of information about persons: Some determinants and implications. Journal of Personality and Social Psychology, 37(10): 1660-1672.

Stajkovic, A., Locke, E., & Blair, E. 2006. A first examination of the relationships between primed subconscious goals, assigned conscious goals, and task performance. Journal of Applied Psychology, 91(5): 1172-1180.

Tsai, W., Chen, C., & Chiu, S. 2005. Exploring boundaries of the effects of applicant impression management tactics in job interviews. Journal of Management, 31(1): 108.

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