Do facial images matter? Understanding the role of private information disclosure in crowdfunding markets

The advancement of the crowdfunding market blurs the boundary of individuals' private and public spheres, but how privacy concerns affect an individual's revealing of private information and how others judge such information revealing is still under limited study. The rapid growth of the debt-based crowdfunding market has provided us with a precious opportunity to examine this problem. Using data collected from debt-based crowdfunding platforms, we find that borrowers of lower socioeconomic status are more likely to disclose their facial image, and those revealing the facial image in their profiles are less likely to default. Voluntary disclosure of private information leads to a lower funding probability in the Chinese debt-based crowdfunding market, while in the US market, we obtain different results. Our results extend the literature on information disclosure by discovering the adverse effect of information revealing on trust-building, suggesting that special caution should be paid when designing information disclosure mechanisms in crowdfunding platforms.