More than a feeling: Investigating the contagious effect of facial emotional expressions on investment decisions in reward-based crowdfunding

Reward-based crowdfunding provides a unique instrument to acquire capital from small investors for a specific project. To successfully campaign for the desired funds, however, entrepreneurs also need to understand the subconscious factors, which influence the funding behavior of potential investors. In pursuit of that goal, this study examines how facial emotional expressions, which are shown in the pictures of project presentations, affect the funding decision. Building upon the emotional contagion theory and evaluating the emotions displayed on the pictures of 18,696 project webpages with a machine-learning algorithm, we show that facial expressions of happiness and sadness positively affect (i.e., encourage) the funding decision. Other than in venture capital markets, an emotional approach of potential investors might hence be a viable strategy in reward-based crowdfunding. As persuasion tool, emotions should nevertheless be used judiciously since we found high intensities of facial emotional expressions to negatively affect the funding decision. •Emotional crowdfunding project presentations stimulate backers' funding decisions.•Facial emotional expressions shown in pictures have a contagious effect on backers.•Expressions of happiness and sadness can increase the total funding amount raised.•Intensive facial emotional expressions can negatively affect the funding behavior.