Does personality still matter in e-commerce? How perceived hubris influences the assessment of founders’ trustworthiness using the example of reward-based crowdfunding

Sundermeier, Janina; Kummer, Tyge-F. Article — Published Version Does personality still matter in e-commerce? How perceived hubris influences the assessment of founders’ trustworthiness using the example of reward-based crowdfunding Electronic Markets Provided in Cooperation with: Springer Nature Suggested Citation: Sundermeier, Janina; Kummer, Tyge-F. (2022) : Does personality still matter in e-commerce? How perceived hubris influences the assessment of founders’ trustworthiness using the example of reward-based crowdfunding, Electronic Markets, ISSN 1422-8890, Springer, Berlin, Heidelberg, Vol. 32, Iss. 3, pp. 1127-1144, https://doi.org/10.1007/s12525-022-00584-6 This Version is available at: https://hdl.handle.net/10419/307387 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Vol.:(0123456789) 1 3 https://doi.org/10.1007/s12525-022-00584-6 RESEARCH PAPER Does personality still matter ine‑commerce? How perceived hubris influences theassessment offounders’ trustworthiness using theexample ofreward‑based crowdfunding JaninaSundermeier1 · Tyge‑F.Kummer2 Received: 13 December 2021 / Accepted: 29 July 2022 © The Author(s) 2022 Abstract Reward-based crowdfunding broadens the scope of e-commerce transactions, as prototypical products are pre-sold under conditions of considerable uncertainty. To date, we know little about the mechanisms that underlie decisions to back rewardbased crowdfunding campaigns. However, it is likely that startup founders’ possibility of showcasing their personalities in video pitches signals their trustworthiness, particularly, as other features, such as quality seals and customer testimonials, are often unavailable. We use signaling theory to reinforce the move from a feature-oriented perspective to a signaling perspective, as signals can transmit information about startup founders’ otherwise imperceptible qualities and abilities. Based on a survey (N = 108), we investigate how perceived hubris – proven to be particularly salient in startup contexts – influences the funding decision of potential backers. We find that abilities and legitimacy of a startup founder are rated positively when s/he is perceived as hubristic. These results have implications for crowdfunding campaigns and highlight the relevance of personality traits in electronic markets. Keywords Reward-based crowdfunding· Personality traits· Hubris· Survey· Intuitive information processing JEL classification D81· M13 Introduction E-commerce has grown continuously over the last decade. Additionally, its growths accelerated substantially during the Covid 19 pandemic, which confined large portions of the world’s population to their homes and led to repeated retail store closures. In fact, the retail volume of non-food products in Europe has dropped by 11.6% in April 2020 (Eurostat, 2022), while the share of e-commerce transactions increased by an average of 10% and even exceeded the share of retail transactions during the multiple lockdowns (Statista, 2021). Also crowdfunding has been used during this time to either secure one’s existence or to meaningfully use time at home to advance one’s business (Igra etal., 2021). The comparability of underlying mechanisms has led to reward-based crowdfunding being increasingly associated as a form of e-commerce where, among other benefits, backers are offered the opportunity to pre-purchase a product as a reward for their investment (Belleflamme etal., 2014; Bi etal., 2017; Cholakova & Clarysse, 2015). Sourcing a future product’s costs from a large crowd of small, non-professional investors, referred to as backers or crowdfunders, is particularly popular with startup founders aiming to overcome their limited financial means (Kunz etal., 2017; Schwienbacher & Larralde, 2012; Thies etal., 2018). However, backers who choose to pre-purchase future products in return for their investments are “subject to an unusually high degree of risk” (Agrawal etal., 2014, p. 68) because of considerable information asymmetries (Ahlers etal., 2015; Burtch etal., 2013; Kuppuswamy & Bayus, 2018) that arise from Responsible Editor: Fabio Lobato * Janina Sundermeier [email protected] Tyge-F. Kummer [email protected] 1 Department ofInformation Systems, Freie Universität Berlin, Garystrasse 21, 14195Berlin, Germany 2 Queensland University ofTechnology, QUT Business School, 2 George Street, 4000Brisbane, Queensland, Australia / Published online: 14 September 2022 Electronic Markets (2022) 32:1127–1144 J.Sundermeier, T.-F.Kummer 1 3 the lack of reliable information with regard to the product’s characteristics, the startup founder’s identity, and the ability to enforce contracts that are concluded online (Datta & Chatterjee, 2008; Granados etal., 2006; Short etal., 2017). The e-commerce literature posits that trust built through a variety of features is imperative to mitigate such information asymmetries (Guo etal., 2018; Kim & Peterson, 2017). However, transferring existing theory about efficient trustbuilding determinants in regular online commerce, which typically offers well-established goods and services, to the preselling of innovative products in reward-based crowdfunding contexts has limitations. In particular, crucial features, such as customer testimonials and quality seals (Everard & Galleta, 2006; Jarvenpaa etal., 2000; Yoon & Occeña, 2015), that have been shown to be efficient to build trust in regular online retailing transactions, are seldom available for startup founders, whose businesses and products are largely unknown (Bi etal., 2017; Burtch etal., 2013; Cholakova & Clarysse, 2015). In addition, customers must be convinced that the product will be successfully produced, which requires an assessment of the company’s capabilities and potential market demand. In an attempt to provide alternative explanations for what determines trust in this form of e-commerce transaction, the focus of research on crowdfunding is increasingly shifting from a feature-oriented perspective to a signaling perspective (Ahlers etal., 2015; Allison etal., 2013; Courtney etal., 2017; Moss etal., 2015; Steigenberger & Wilhelm, 2018). Signals are verbal and non-verbal cues that transmit relevant information that backers consciously or unconsciously process in assessing startup founders’ ambitions, capacities, and skills (Connelly etal., 2011; Kunz etal., 2017). Especially the personality of entrepreneurs (OED, 2015) - a combination of characteristics or qualities that form an individual’s distinctive character – and their various personality traits, defined as enduring propensities to act in certain ways, are found to serve as signals that allow to assess an individual’s behavior (Allport, 1961; McElroy etal., 2007; Rauch & Frese, 2007). Research to date has shown that personality is highly relevant in day-to-day business activities as signaling a disposition to innovation, autonomy (Allison etal., 2013), competitiveness aggressiveness, and risk-taking (Moss etal., 2015), as well as agreeableness and openness (Thies etal., 2016), positively influence the outcomes of online investment decisions. To further advance the state of knowledge in these regards, we aim to establish a link between personality traits and trustworthiness – the key determinant of successful e-commerce transactions (Guo etal., 2018; Kim & Peterson, 2017) – by examining how personality serves as a signal for trustworthiness in rewardbased crowdfunding campaigns. To achieve this objective, we focus on perceived hubris, a comparatively extreme personality dimension that is characterized by excessive pride, exaggerated confidence, and an inflated feeling of self-worth (Judge etal., 2009; Owen & Davidson, 2009; Petit & Bollaert, 2012), based on the following reasons. First, the hubris theory of entrepreneurship suggests that these traits are particularly salient in startup contexts, as hubristic startup founders in particular are well equipped to handle high levels of uncertainty, time constraints, and considerable failure rates (Bollaert & Petit, 2010; Hayward etal., 2006; Ranft & O’Neill, 2001). Second, the focus on specific and clearly delineated traits is shown to have a higher predictive validity compared to broader traits, such as the ‘big five model’ (Aldrich, 1999; Barrick & Mount, 2005), which has been widely used in previous research. Third, recent evidence indicates an interesting ambiguity between the positioning of hubris as a ‘dark’ personality dimension and hubristic founders’ potential to signal a strong ability to turn the business into a success story, that is not yet well understood (Sundermeier etal., 2020). Reward-based crowdfunding campaigns provide a unique context to examine the role of backers’ perceptions of startup founders’ personalities, given the influence of video pitches on the success of such campaigns (Kickstarter, 2021; Mollick, 2014). To generate empirical evidence for the relevance of hubris for the outcomes of reward-based crowdfunding campaigns, we conduct a survey (N = 108) by drawing upon an US MTurk sample to examine these relationships empirically. This methodological approach allows us to provide answers to the following research question: How does perceived hubris influence startup founders’ trustworthiness in reward-based crowdfunding campaigns? By answering this question, the paper contributes to the literature on the determinants of funding intention in rewardbased crowdfunding scenarios. Our findings indicate that in the absence of trust-building determinants that have been shown to be effective in regular online retailing transactions, personality traits such as hubris are powerful signals that allow startup founders to mitigate information asymmetries and thereby influence the investment intentions of potential backers. By drawing on signaling theory, we show that the personality displayed in a pitch video serves as a signal for the assessment of startup founders’ trustworthiness. To that end, we observe that the perception of hubris activates specific trust dimensions, such as legitimacy and ability, while other factors such as benevolence and empathy occur only when hubris is not perceived. With these findings, we also contribute to the hubris theory of entrepreneurship in the sense that we provide empirical evidence that hubris should not be viewed as an exclusively dark personality dimension leading to suboptimal behavior, as claimed in some recent publications on hubristic leadership (Sundermeier etal., 2020; Tang etal., 2018). On the contrary, their personalities signal strong abilities and legitimacy, allowing them to reduce information asymmetries that would otherwise discourage crowdfunders from completing the online transaction. We proceed as follows: After we present the state of the extant literature on what determines crowdfunders’ perceptions of trustworthiness, we introduce hubris and, drawing 1128 Does personality still matter ine‑commerce? How perceived hubris influences theassessment… 1 3 on signaling theory, discuss the relevance for the assessment of startup founders’ trustworthiness. Next, we describe the selected methodology and present the results. After discussing the results, we conclude with a discussion of theoretical and practical implications. Theoretical background Unlike equity crowdfunding, backers who pledge money in reward-based crowdfunding campaigns are offered nonmonetary rewards like prominent credit for the final product, involvement in the creative product-development process, a meeting with the startup founders, a copy of the product, or the option to pre-purchase the product (Bi etal., 2017; Cholakova & Clarysse, 2015). A prominent example of such a campaign is the smartwatch Pebble, for which 68,929 crowdfunders pledged more than $10M in return for the first model (Agrawal etal., 2014; Brown etal., 2017; Mollick, 2014). The option to pre-purchase a tangible product in return for an investment makes funders early customers and triggers the association of reward-based crowdfunding as a form of e-commerce (Ahlers etal., 2015; Beier & Wagner, 2015; Gierczak etal., 2014). The initiators of Kickstarter, a leading platform for reward-based crowdfunding campaigns, deny this analogy by emphasizing that “many people feel like they’re shopping at a store when they’re backing projects on Kickstarter, but we want to make sure that it’s not one” (Strickler etal., 2012). The essence of this quote refers to the distinct scopes of regular online retailing and reward-based crowdfunding. Regular online retailing is pursued to sell, trade, and distribute products and services that already exist (Chiu etal., 2014; Gefen etal., 2003; Guo etal., 2018), while the usual objective of reward-based crowdfunding is to source money for making new products that do not yet exist (Burtch etal., 2013). The novelty of the product and the limited reputation of the startup founders who pursue such campaigns make it difficult for them to show that they are trustworthy and capable of successfully manufacturing the products described in their campaigns. Determinants oftrustworthiness ine‑commerce andreward‑based crowdfunding The e-commerce literature shows that trustworthiness acts as an informal control mechanism that reduces friction, limits opportunistic behaviors, minimizes the need for bureaucratic structures, and helps build long-term relationships (Bhattacherjee, 2002; Fang etal., 2014; Kim & Peterson, 2017). A lack of trust is “one of the greatest barriers inhibiting internet transactions” (Kim etal., 2004, p. 393), and buyers are willing to pay price premiums when they perceive online retailers as trustworthy (Ba & Pavlou, 2002; Gefen etal., 2003; D. Kim & Benbasat, 2009; Kim, 2014). Buyers’ trust is decisively influenced by how confident they are with respect to sellers’ ability, benevolence, and integrity (Fang etal., 2014; Mayer etal., 1995). These three dimensions are core cognitive and affective elements that determine trust formation in many contexts (G. Jones & George, 1998; Kim etal., 2004; Singh & Sirdeshmukh, 2000). The rising relevance of signals including all kinds of visual cues for the successful complementation of e-commerce transactions has prompted several scholars to additionally include empathy and legitimacy in their assessment of online retailers’ trustworthiness (Fairchild, 2011; Kwak etal., 2019). For startup founders, the ability dimension refers to their competencies, skills and knowledge (Gefen etal., 2003; Guo etal., 2018). Backers who support reward-based crowdfunding campaigns need to assess whether the founder has the necessary abilities to convey the prototypical product into a marketable good (Burtch etal., 2013; Courtney etal., 2017; Zhang & Liu, 2012). The benevolence dimension refers to the extent to which the startup founders have good intentions beyond their own profit (Fang etal., 2014) and are empathic to understand the need and wants of others. Backers need to assess whether the founder is receptive to the target group’s needs so people feel addressed and pledge the money that will meet the founder’s funding goal (Ahlers etal., 2015; Colombo etal., 2015). The integrity dimension refers to the extent to which the founder is expected to adhere to a set of principles or rules of exchange that is acceptable to all parties involved (Bhattacherjee, 2002; Kim & Peterson, 2017), which is closely linked to their legitimacy, describing the extent to which their actions taken to turn the envisioned product into reality are perceived as desirable and appropriate. To that end, backers need to assess to whether the founder is willing to be fair in conducting the transaction by producing a product that carries the promised values and is delivered on time (Herzenstein etal., 2011; Mollick, 2014). Features that enhance buyers’ trust in regular online retailing transactions, such as customer testimonials and direct communication channels (Jarvenpaa etal., 2000; Yoon & Occeña, 2015), design features and quality seals (Everard & Galleta, 2006; K. Jones & Leonard, 2008; Schlosser etal., 2006), and various security measures (Hu etal., 2010; Kim etal., 2004; McKnight etal., 2002), are seldom available to startup founders. In particular, first-time founders do not usually have any kind of reputation, cannot offer any credible customer testimonials for a product that does not yet exist, and usually operate on third-party platforms whose design features they can hardly influence (Bi etal., 2017; Cholakova & Clarysse, 2015; Kim etal., 2008). Potential backers can assess information related to the future product’s characteristics and features only through textual and visual descriptions provided by a single source, the founders themselves (Efrat & Gilboa, 2020; Schwienbacher & 1129 J.Sundermeier, T.-F.Kummer 1 3 Larralde, 2012; Thies etal., 2016). However, videos can significantly increase the chances of achieving the funding target (Mollick, 2014). To find alternative determinants that can influence crowdfunders’ investment intentions, scholars examine the suitability of diverse signals to transmit intangible information regarding the characteristics of the founders and their ventures (Ahlers etal., 2015; Allison etal., 2013; Moss etal., 2015; Steigenberger & Wilhelm, 2018). Their findings indicate that the number of previous backers and their assessments of campaigns, as shared through their social networks, are quality signals that can influence crowdfunders’ investment decisions (Herzenstein etal., 2011; Lin etal., 2009; Thies etal., 2018; Zhang & Liu, 2012). However, these insights explain only network effects, not how the network of supporters grew in the first place or how the early backers’ perceptions of startup founders’ trustworthiness was influenced, even though it appears that perceptions of certain personality traits of startup founders play a central role in this regard (Bollaert etal., 2020; Sundermeier & Kummer, 2018; Thies etal., 2016). Signaling hubris tobe perceived astrustworthy Personality traits are enduring propensities to act and exhibit certain types of responses to situations (Caprana & Cervone, 2000; Devaraj etal., 2008). Thus, they are considered suitable predictors of an individual’s behavior (McElroy etal., 2007; Rauch & Frese, 2007). Given the frequency of video pitches in which founders, their products, and their ventures appear in crowdfunding campaigns (Mollick, 2014), scholars have started to focus on the impact of personality traits on crowdfunders’ investment intentions (Ahlers etal., 2015; Allison etal., 2013; Moss etal., 2015). This research interest is triggered by studies in traditional offline investment scenarios that determine that startup founders’ personality traits influence venture capitalists’ and business angels’ investment decisions (Cardon etal., 2009; Chen etal., 2009; Sudek, 2007). However, these studies observe the effects during direct interactions between founders and investors. The extent to which personality traits or other cognitive features influence investment decisions in online contexts (without personal interaction) remains unclear (Hoegen etal., 2018). The first empirical findings in this regard indicate that showing an entrepreneurial orientation and the ‘big five’ personality dimensions positively influences backers’ investment intentions (Allison etal., 2015; Moss etal., 2015; Thies etal., 2016). These contributions provide a valuable step forward in theory development on the determinants of crowdfunding outcomes, but their broad scope carries risks that led management scholars to conclude two decades ago that “research on personality traits seems to have reached an empirical dead end” (Aldrich, 1999, p. 76). This criticism was directed towards broad personality traits like the ‘big five’ model to describe the human personality and psyche (Cogliser & Brigham, 2004; Ensley etal., 2006; Rauch & Frese, 2007). Studies that use these broader traits are significantly lower in their predictive validity than studies that focus on single, narrow traits and “rely on explicit descriptions that may be situated in time, place, or role” (Barrick & Mount, 2005, p. 367). One of such narrower traits that is directly linked to venture creation processes is hubris (Bollaert & Petit, 2010; Picone etal., 2014; Ranft & O’Neill, 2001). The hubris theory of entrepreneurship suggests that hubris is particularly salient in startup contexts, as it supports founders’ abilities to enact their seemingly far-fetched plans despite high failure rates, time constraints, and high levels of uncertainty (Hayward etal., 2006). The term hubris originates from Greek mythology and describes a set of several personality traits, such as excessive pride, exaggerated confidence, and an inflated feeling of self-worth (Judge etal., 2009; Owen & Davidson, 2009; Petit & Bollaert, 2012). Previous studies indicate, that despite being labelled a dark personality trait, hubris is likely to have ‘bright’ outcomes for venture performance, as hubristic leaders may have a strong vision that they pursue without being frightened by challenges (Judge etal., 2009; Sundermeier etal., 2020; Zuckerman & O’Loughlin, 2006). Haynes etal. (2015) are the first to discuss conceptually the influence of hubris on perceptions of entrepreneurs’ trustworthiness, but empirical findings in this regard are scarce. In order to understand how the perception of hubris influences investment decisions communication models can be used. Traditional approaches such as the transmission model (Shannon, 1948) understand communication as the transmission of information between a sender and a receiver via a certain channel. While these models are highly influential in communication studies, they do not consider interpretation differences on the receiver side. The semiotic theory overcomes this problem as it assumes that “[…] messages are made of signs and conveyed through sign systems called codes; meaning is derived only to the degree that the receiver of the message understands the code.” (Moriarty, 2002, p. 22). A sign is defined as an element that has meaning for someone in some respect or capacity (Peirce, 1991). However, there is a difference between what we mean, what we say, and how it is perceived from a particular perspective in a specific context (Chandler, 2017). This theoretical frame shows similarities with signaling theory, suggesting that signals can reduce information asymmetries between two parties (Janney & Folta, 2003; Spence, 1973). The information that the sender provides can be interpreted as signals 1130 Does personality still matter ine‑commerce? How perceived hubris influences theassessment… 1 3 that are not readily available to others and influence the decision making of the receivers (Connelly etal., 2011; Spence, 2002; Stiglitz, 2000). In the context of crowdfunding, startup founders are the signal senders as they have intimate knowledge about the venture’s prospects, their commitments, and the state of product development. Backers are the receivers of these signals as they need this information to make informed inferences about whether they should commit a financial investment or not (Ahlers etal., 2015; Busenitz etal., 2005). To that end, founders are eager to meet this need by communicating the knowledge they have so potential backers will decide in their favor (Ahlstrom & Bruton, 2006; Mäkelä & Maula, 2006; Schwienbacher, 2007). Using the lens of semiotics, we explore how the personality trait of hubris and the verbal and non-verbal communication associated with this perceived trait influences potential investors. However, since the perception of signs is subjective, we differentiate between those potential backers who perceive the specific personality trait of hubris and those who do not in order to determine differences in the underlying mechanisms that build trustworthiness and influence investor’s decision making. Research model We examine how perceptions of hubris influence the funding intention of potential backers in reward-based crowdfunding scenarios. Therefore, we determine how the perception of hubris signals trustworthiness, which we capture through five different dimensions. Furthermore, we investigate how these dimensions of trustworthiness influence the expected product success, which captures the extent to which potential backers believe that the product will be successful as well as the intention to back the crowdfunding campaign to obtain the product. Operationalization ofhubris The scholars adhere to established conceptualizations (Judge etal., 2009; Owen & Davidson, 2009; Petit & Bollaert, 2012) and define (perceived) hubris as a personality dimension that is characterized by excessive pride, exaggerated confidence, and an inflated self-worth. People with high levels of confidence tend to overestimate their self-worth, talents, abilities, and accomplishments (Hiller & Hambrick, 2005; Judge etal., 2009), which strengthens their belief in own abilities to succeed and leads them to engage in risky endeavours (Hayward & Hambrick, 1997; Owen & Davidson, 2009; Petit & Bollaert, 2012). Case studies of hubristic startup founders like Mark Zuckerberg and Jeff Bezos indicate that the expression of these traits projects power, strength, and authority (Bollaert & Petit, 2010; Judge etal., 2009) and positively affects external actors’ perceptions (Hayward, 2007; Ranft & O’Neill, 2001). Such founders are seen as the main drivers of innovation processes, as they signal that they have sufficient courage and an unshakable belief in their ability to initiate new ventures successfully (Hayward etal., 2006; Picone etal., 2014). On the downside, excessive pride, which, unlike authentic pride, is often associated with arrogance, can negatively influence perceptions of an individual’s authenticity (Tracy etal., 2009). Hubristic founders tend to focus primarily on self-enhancing values and attribute positive achievements to themselves (e.g., “I am successful because of my intelligence”) (Haynes etal., 2015). The public expression of their superiority can signal aggression and a negative view of others, which are antisocial tendencies that provoke dislike (Hoorens etal., 2012; Van Damme etal., 2016). Influence ofperceived hubris oncrowdfunders’ funding decisions Building on recent findings on hubristic leadership (Sundermeier etal., 2020; Tang etal., 2018), we argue that hubris signals both beneficial and detrimental attributes depending on the activity for which hubristic founders are evaluated. Their visionary power and unwavering belief in their value proposition is likely to signal strong abilities, integrity, and legitimacy to turn the promised product into reality. Yet hubristic founders are highly self-centered and focused on their own needs and desires, which might impair their ability to signal benevolence and empathy for the desires of others. In particular, their exaggerated confidence and lack of selfdoubt convinces hubristic entrepreneurs that their products and services have the potential to disrupt existing markets (Sundermeier etal., 2020), which might not necessarily be the case in reality (Picone etal., 2014; Ranft & O’Neill, 2001). In more detail, expressing their unshakable belief in themselves and their products signals power, strength and authority (Judge etal., 2009; Owen & Davidson, 2009), attributes that are frequently associated with ability (Hayward etal., 2006; Thies etal., 2016). Using these findings, we argue that hubris is a strong signal of the competencies and skills that are required to convey a prototypical product to the market and to handle the transactions necessary to manufacture and deliver the final product (Sundermeier etal., 2020). The perception of such abilities is likely to be one of the core drivers of crowdfunders’ expected product success. This is highly relevant in a crowdfunding setting as receiving the promised product depends on the founder’s ability to meet the funding target and produce the product as promised (Burtch etal., 2013; Kuppuswamy & Bayus, 1131 J.Sundermeier, T.-F.Kummer 1 3 2018; Thies etal., 2014). Therefore, we argue that hubris serves as a signal for a startup founder’s perceived abilities, which positively influences crowdfunders’ expectation that the product will be successful. We hence state: H1: In case the entrepreneur is perceived as hubristic, the perceived ability of the entrepreneur will positively influence the investment decision. Similar to the ability dimension, the startup founders’ integrity is likely to be positively influenced by their perceived hubris signaling that they have the power and strength required to fulfill the online transaction involving the delivery of the final product as described in their video pitch (Claxton etal., 2015; Hayward & Hambrick, 1997; Picone etal., 2014). The signal transports their ambition and willingness to establish target-oriented collaborations with partners necessary to manufacture and deliver the future product. To that end, their overly self-confident appearance is discussed to leave no doubt that they will do everything possible to fulfil the terms and conditions of the contract between them and the backers (Eckhaus & Sheaffer, 2018). Therefore, we propose that perceived hubris serves as a signal that positively influences the assessment of startup founders’ (perceived) integrity, which has positive implications for the expected product success: H2: In case the entrepreneur is perceived as hubristic, the perceived integrity of the entrepreneur will positively influence the investment decision. Closely related to their perceived integrity is their legitimacy, as it is discussed that hubristic founders convincingly signal that they retain control over all necessary activities and the progress of their projects (Brady & Davies, 2010; Kroll etal., 2000; McManus, 2016). This signal is of particular importance in reward-based crowdfunding scenarios since backers pre-purchase a future product and need to trust the legitimacy of the founder to be able to turn the vision into an actual product that meets the values communicated in their pitch. Their overly selfconfident appearance is hence expected to be perceived as a signal that hubristic founders neither spare any efforts to fulfill their side of the contracts nor their promise to deliver the intended product as presented. Following this line of argument, we state: H3: In case the entrepreneur is perceived as hubristic, the perceived legitimacy of the entrepreneur will positively influence the investment decision. On the downside, hubristic founders are also highly egocentric as expressed through their strong focus on self-enhancing values (Haynes etal., 2015; Hoorens etal., 2012; Van Damme etal., 2016). As a consequence, they often fail to take other parties’ opinions into consideration (Brady & Davies, 2010; Kroll etal., 2000; McManus, 2016). This approach is especially problematic for startup founders, who usually set out to develop a value proposition that addresses the needs and wants of a broad target group. Since hubristic founders hardly consider needs and wants beyond their own, they are unlikely to validate their value proposition through interactions with their target group (Picone etal., 2014; Ranft & O’Neill, 2001). Since potential backers, however, assess the extent to which startup founders are receptive to their needs and willing to address them in the future product (Ahlers etal., 2015; Colombo etal., 2015), we argue that backers rate hubristic founders’ benevolence as low. Nevertheless, a positive assessment of benevolence is expected to be another determinant of backers’ expected product success, as they can expect a future product that meets their expectation only if the product is backed by many people who believe that the product can be produced successfully. Consequently, we propose that signals of hubris are counterproductive for the assessment of a startup founders’ (perceived) benevolence, which is why only: H4: In case the entrepreneur is not perceived as hubristic, the perceived benevolence of the entrepreneur will positively influence the investment decision. As with benevolence, we expect hubristic founders to be perceived as non-empathic, as they focus on their own needs and wants instead of those of their target group (Hayward etal., 2006; Ranft & O’Neill, 2001). Hence, we argue that hubristic entrepreneurs cannot signal convincingly that they are empathic to the needs of their target group, although (perceived) empathy is expected to have a positive influence on crowdfunders’ expected product success. H5: In case the entrepreneur is not perceived as hubristic, the perceived empathy of the entrepreneur will positively influence the investment decision. Extant studies show that the expected product success is a determinant of potential backers’ purchase intentions (Bi etal., 2017; Cholakova & Clarysse, 2015), so we hypothesize: H6: The expected product success positively influences the crowdfunders’ intention to support the campaign. Figure1 summarizes the research model. 1132 Does personality still matter ine‑commerce? How perceived hubris influences theassessment… 1 3 Methodology The research design combines a video pitch with a survey. The video expressed hubris to measure how its perception affects the facets of perceived trustworthiness that encourage backers to invest in reward-based crowdfunding campaigns. Materials The survey contained a pitch video that was adapted from a real-world crowdfunding campaign. The campaign was selected based on four criteria: (1) The founder succeeded in raising the targeted amount of money To ensure that the product featured in the video is of interest to a wider audience, and thus that there is an actual market for the product, we focused on campaigns that have been successfully completed. (2) The product and pitch are easy to understand without specific knowledge To avoid biases resulting from misunderstandings about the features of the core product and the value it brings to customers, we screened campaigns for easyto-understand products that have the potential to solve a problem that is familiar to a broader audience. (3) The product price is relatively low and affordable by most We also wanted a campaign that offered an affordable product to minimize biases due to limited financial resources that could further influence the investment decision. (4) The product is still relatively unknown and not yet established in the market To avoid biases based on the reputation a product already enjoys, we further narrowed down the number of campaigns that already meet the aforementioned selection criteria to those that have not received significant (social) media attention. To identify appropriate pitches, we considered successful crowdfunding campaigns across leading platforms that feature reward-based crowdfunding campaigns, such as Kickstarter and IndieGoGo. We selected a non-absorbent T-shirt1 as the campaign best fulfilled all our criteria. Next, we examined the arguments about the T-shirt’s benefits that were presented in the original pitch. Then, based on a literature analysis that indicated that hubristic individuals tend to talk fast and snappy, with a contemptuous inflection and a focus on themselves and their personal attributes, we determined the video’s ‘tone and temper’ in terms of the personality traits that are associated with hubris (Bass, 1990; Baumeister etal., 2003; Todorovic & Schlosser, 2007). These characteristic expressions of hubris were discussed with a professional native English-speaking actor and a director to determine how they would be most naturally expressed in a pitch video. Fig. 1 Research model – The influence of hubris on the funding intention when hubris is perceived or not perceived 1 https:// www. kicks tar ter. com/ proje cts/ ably/ ablytmunbel ievab lyodorandstainrepel lantnatur 1133 J.Sundermeier, T.-F.Kummer 1 3 Since we intend to develop a model that explains crowdfunding success based on hubristic personality traits, we selected a presentation style that displayed hubris characteristics, including a focus on the founder (e.g., “I can change something”) and the founder’s vision, signaling exaggerated confidence and excessive pride. The first version of the pitch was recorded and discussed with colleagues, founders, and supporters of crowdfunding campaigns to ensure the video pitch was realistic. Feedback from this discussion was used to rework the scripts, and the final pitch was recorded with a professional actor using a university’s professional video-recording facilities. The survey began with an explanation of the scenario and the video pitch, followed by the question items to measure the constructs in our research model. In the last part of the survey, demographic data was collected, including age, gender, and experience with crowdfunding. All constructs were measured on a 7-point Likert-type scale, as suggested in previous research from which we adopted our items and scales. Appendix Table3 contains all question items related to the latent variables in the research model. Since the perception of hubris is subjective, we used three question items addressing different facets of hubris: excessive self-confidence, exaggerated pride, and inflated positive self-evaluations to calculate a formative latent variable score using SmartPLS 3. Based on this score, a median split was conducted (Iacobucci etal., 2015; Rhodes etal., 2002). The reasoning behind that split is that hubris is an extreme trait, and it is unlikely that the relationship between hubris and trust is linear. Therefore, we separate aspects such as ‘normal’ self-confidence, which is to some degree expected from an entrepreneur, from excessive self-confidence. In order to test our hypotheses, we conducted a structural equation model estimation using partial least squares (PLSSEM) (Hair etal., 2013). The PLS analysis was performed for each group (high and low split) independently and an additional PLS multi-group analysis (MGA) was used to compare both groups directly in a post hoc analysis. Participants The data collection took place in February 2021. 108 Participants were recruited via Amazon MTurk with a filter setting to include only US residents to minimize the influence of external factors (e.g., the popularity of crowdfunding in different countries). Based on a moderate effect size (0.15) and an α error probability of 0.05, G*Power 3.1 suggests a statistical power greater than the recommended 0.80 for that sample size (Faul etal., 2007). Table1 contains the demographic data of the participants. For the median split, the sample was divided into two subgroups (N = 64 and N = 46). Since hubris is an extreme behavior, we assigned the median to the group that does not perceive hubris. Thus, the group sizes differ. The hubris perception differs substantially between the groups. While the mean in the high split group is 6.07 (out of 7), it is only 3.34 in the low split group. The educational level of the participants was high as more than 62% had completed some form of higher education (Bachelor, Master, or PhD). Results Measurement model We evaluate the measurement model quality using indicator reliability, internal consistency, as well as convergent and discriminant validity (Chin, 2010; Hair etal., 2012). We measured the indicator reliability based on the factor loadings. According to Chin (2010), all factor loadings should be above the threshold of 0.7. This criterion is fulfilled in both groups (high and low median split; see Appendix Table3). Internal consistency can be determined by calculating Cronbach’s alpha and composite reliability (Hair etal., 2012). Cronbach’s alpha of all constructs in both groups is greater 0.8, and therefore above the recommended threshold of 0.7. Similarly, composite reliability is always above 0.8 suggesting adequate internal consistency. Moreover, the average variance extracted (AVE) is for all constructs above 0.7, fulfilling the criteria for convergent validity (Bagozzi & Yi, 1988). All constructs load primarily on the related construct (factor loadings on the main construct exceed cross-loadings, see Appendix Tables4 and 5), and the Fornell–Larcker criterion is fulfilled (square root of the AVE scores exceed construct correlations, see Appendix Tables6 and 7) (Fornell & Larcker, 1981). We conclude that discriminant validity is achieved. Table 1 Participants’ demographics for the entire sample Participants (completed questionnaires) 108 Gender  Female 39.81%  Male 60.19% Not specified 0.93% Age (mean) in years 42.85 Highest eeducation  No school completed  High school graduate, diploma or equivalent  Trade/technical/vocational training  Bachelor’s degree  Master’s degree  Professional degree  Doctorate degree 0.00% 16.67% 19.44% 54.63% 6.48% 0.93% 1.85% Perceived hubris (7-point Likert Scale)  High split group (mean)  Low split group (mean) 6.07 3.34 1134 Does personality still matter ine‑commerce? 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