Warm-Glow Giving, Hedonism, and Their Influence on Muslim User Engagement in a Loan-Based Crowdfunding Platform

Sutanto, Juliana and Wenninger, Helena and Duriana, Handre (2021) Warm-Glow Giving, Hedonism, and Their Influence on Muslim User Engagement in a Loan-Based Crowdfunding Platform. Journal of the Association for Information Systems, 22 (2): 7. ISSN 1536-9323

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Abstract

This paper investigates how platform design features affect the funding motivation of Muslim users on a loan-based crowdfunding platform. Theoretically grounded in Andreoni’s warm-glow giving theory and Sober and Wilson’s model of evolutionary and psychological giving, this work has high practical relevance in light of the increasing demand for Islamic financial products. Loan-based crowdfunding platforms are important to the unique context of this research since Islamic religious constraints regulate monetary transactions concerning lending. We used a scenario-based survey developed on the basis of a pilot study and confirmed by our manipulation check. The results showed that ‘hedonism’ represented by monetary interest negatively affected Muslim users’ willingness to engage in a loan-based crowdfunding platform. This finding challenges the commonly agreed-upon egoistic motivator for loan-based crowdfunding platforms (i.e., monetary interest) that is designed based on Western Christian and Chinese Confucian capitalist economic and financial paradigms. Remarkably, we also found that the Muslim funders' willingness to engage on the hedonistic platform had an exponentially positive effect on the amount of money that the funders are willing to lend. By contrast, ‘warm-glow giving’ manifested as belongingness to a community had no effect on users' engagement. Implications of these findings for theory and practice are discussed.