Information Asymmetry in Quasi Public
Good Crowdfunding: A Case from China’s
EV Charging Pile Market
Yan LIa, Qi ZHANGa,*, Lijing ZHUa, Ge WANGa, Siyuan CHENa
a Academy
of Chinese Energy Strategy, China University of Petroleum-Beijing,
18 Fuxue Road, Changping Dist., Beijing 102249, China
Content
 Introduction
 Methodology
 Result
 Conclusion
2
Background
Cope with
energy exhaustion
Emerging battery
technologies
Reducing air pollution
 Developing electric vehicle (EV)
has became a irreversible trend.
3
Quantity of Charging Piles and EVs (thousand)
Background
600
600
 Insufficiency of charging
piles in China
500
 The amount of public
charging piles only takes
23.29% of private EVs
435
400
300
200
100
5.008
21.5
0
Public Charging Piles
2015
Private EVs
2020 (goal)
Current condition and future goal of EVs and charging piles in Beijing
Source: Wind DB
4
Background
Financing difficulties of quasi public good
 Quasi public good
provides benefits to the public, but could theoretically be restricted
with a toll system.
 Utilities (roads, pipelines, parks, etc.)
Distributed energy system (residential area PV power system,
charging piles , residential heating system, etc.)
 High externality
free ride instead of offer QPG independently
 Offer by government
undersupply of QPG
5
Background
Crowdfunding
Definition
funding a project or venture by raising monetary contributions
from a large number of people.
Benefits
•
•
•
•
risk diversification
many a little makes a mickle
gather information from crowds
promote product design
6
Background
Main obstacle in Chinese crowdfunding market
High default rate undermines investors’ confidence
Lack of supervision
U.S.A.
Italy
JOBS (Jumpstart Our Business Startups Act)
Decreto Crescita Bis
Information Asymmetry
7
Content
 Introduction
 Methodology
 Result
 Conclusion
8
Research Scale
amount of adjacent nodes with positive views
𝑡𝑜𝑡𝑎𝑙 𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑎𝑑𝑗𝑎𝑐𝑒𝑛𝑡 𝑛𝑜𝑑𝑒𝑠
① Herd effect (different from rational man)
Give up
Dilemma Zone
Join
② Social reputation (consider default risk)
The formation of reputation along the social network
Social Network
(scale-free network)
In scale-free network small-world effects coexist with a large
heterogeneity in neighborhood size, which is a good abstract of the realworld.
9
Research Scale
amount of adjacent nodes with positive views
𝑡𝑜𝑡𝑎𝑙 𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑎𝑑𝑗𝑎𝑐𝑒𝑛𝑡 𝑛𝑜𝑑𝑒𝑠
① Herd effect (different from rational man)
Give up
Dilemma Zone
Join
② Social reputation (consider default risk)
The formation of reputation along the social network
Social Network
(scale-free network)
In scale-free network small-world effects coexist with a large
heterogeneity in neighborhood size, which is a good abstract of the realworld.
10
Research Scale
Make decisions based
on the potential profit
① Herd effect (different from rational man)
Give up
Dilemma Zone
Join
② Social reputation (consider the impacts of default risk)
The formation of reputation along the social network
Social Network
(scale-free network)
In scale-free network small-world effects coexist with a large
heterogeneity in neighborhood size, which is a good abstract of the realworld.
11
Decision Horizon
Different Projects
Periods
Potential Crowdfunders
Crowdfunding Platform
Join or not
(at the beginning of each project)
Default or not
(for each existing project)
12
Flowchart of Methodology
Start
①. Dividend rate
proportion of
revenue that CFrs
can get from CF
Platform
（Initialization）
①
Potential
Crowdfunders
t=t+1
No
t T
②
④
No
No
t T
Yes
Default ?
Yes
Yes
No Pay dividends
Calculate
existing projects
Yes
No
③ Calculate the potential profit
of joining crowdfunding f(r)
No
t=t+1
Set the parameter of
crowdfunding
Observe the attitudes
of adjacent nodes
Yes
Do not
join
Crowdfunding
Platform
Construct quasi public
goods of the new projects
Crowdfunding
Platform
Yes Join
Stop
13
Flowchart of Methodology
Start
①. Dividend rate
②. Herd Effect
the threshold of
make decision
directly instead of
calculate the profit
（Initialization）
①
Potential
Crowdfunders
t=t+1
No
t T
②
④
No
No
t T
Yes
Default ?
Yes
Yes
No Pay dividends
Calculate
existing projects
Yes
No
③ Calculate the potential profit
of joining crowdfunding f(r)
No
t=t+1
Set the parameter of
crowdfunding
Observe the attitudes
of adjacent nodes
Yes
Do not
join
Crowdfunding
Platform
Construct quasi public
goods of the new projects
Crowdfunding
Platform
Yes Join
Stop
14
Flowchart of Methodology
Start
（Initialization）
①
Potential
Crowdfunders
t=t+1
No
t T
②
④
No
No
t T
Yes
Default ?
Yes
Yes
No Pay dividends
Calculate
existing projects
Yes
No
③ Calculate the potential profit
of joining crowdfunding f(r)
No
t=t+1
Set the parameter of
crowdfunding
Observe the attitudes
of adjacent nodes
Yes
Do not
join
Crowdfunding
Platform
①. Dividend rate
②. Herd Effect
③. Scale Effect
the revenue of each
QPG is positively
related to its
market scale
Construct quasi public
goods of the new projects
Crowdfunding
Platform
Yes Join
Stop
15
Flowchart of Methodology
Start
①. Dividend rate
②. Herd Effect
① Crowdfunding
③. Scale Effect
t=t+1
Platform
④. Policy – Penalty
No
fine the CF
Set the parameter of
Platform a certain
crowdfunding
proportion of the
t T
Yes
Yes
④
revenue if they
No
Pay dividends
Default ?
choose to default
（Initialization）
Potential
Crowdfunders
t=t+1
No
t T
Observe the attitudes
of adjacent nodes
②
Yes
Do not
join
Yes
No
Calculate
existing projects
Yes
No
③ Calculate the potential profit
of joining crowdfunding f(r)
No
Construct quasi public
goods of the new projects
Crowdfunding
Platform
Yes Join
Stop
16
Crowdfunders
Potential profit (don’t
know the specific value of scale and default factor)
(1)
yield forecast
(Scale effect)
Default forecast
(2)
① Charging pile ↑
EV sales ↑
(based on historical data)
revenue of charging pile ↑
② Scale forecast
③ Random variable
describes the change of yield that can’t be explained by scale
factor
17
Crowdfunding Platform
Potential profit (knows the specific value of scale and default factor)
(3)
Yield forecast (Scale effect)
Default (at most once in each project)
18
Information Asymmetry
1. Decision variables
Crowdfunding Platform
Potential Crowdfunders
Default or not
Join or not
2. Market scale 𝑵𝑶𝑫𝒓+
Crowdfunding Platform
Crowdfunding scale
√
Potential Crowdfunders
×
19
Content
 Introduction
 Methodology
 Result
 Conclusion
20
Data
Nomenclature
Implications
Value
𝑁𝑂𝐷
Total amount of nodes
2000
PJ
Duration of each project
10
T
Amount of projects
30
PCF
Financing amount of each contract
1.2
CCP
Construction cost of charging pile
0.2
𝑅𝐶𝐹0
Initial dividend ratio
0.5
𝑆𝑇0𝑒,𝑐 ∙ 𝐹𝐸𝐸0
Initial expected yield
0.15
Degree of scale-free network
3
Times of simulation
100
21
Sensitivity - Herd effect
Lower threshold
Default ratio
Join ratio
Higher threshold
1. The lower threshold in decision making significantly impacts the crowdfunding
scale (join ratio).
people are more likely to be affected by the negative attitude
22
Sensitivity - Scale effect
Default ratio
Join ratio
Slope of yield forecast
Slope of yield forecast
2. The stronger the scale effect is, the more investors it will attract and the
lower default ratio will be.
23
Sensitivity - Dividend ratio
Default ratio
Join ratio
Dividend ratio
Dividend ratio
3. The dividend ratio has a positive correlation with the join ratio or the default
ratio. So there exist an optimal value for dividend ratio: 0.6.
24
① reduce the default rate;
② enhance investors’ confidence.
Penalty
Default ratio
Join ratio
4. The increase of penalty significantly reduce the default ratio and increase
platform’s profit.
25
Content
 Introduction
 Methodology
 Result
 Conclusion
26
Conclusion
1. The lower threshold in decision making significantly impacts the
crowdfunding scale (join ratio).
2. The stronger the scale effect is, the more investors it will attract and the
lower the default ratio will be.
3. The dividend ratio has a positive correlation with the join ratio or the
default ratio. So there exist an optimal value for dividend ratio: 0.6.
4. The increase of penalty significantly reduce the default ratio and increase
platform’s profit.
Suggestion:
1. For CF Platforms: Enhance advertising
Set the dividend ratio around 0.6
2. For government: Implemented a strict penalty mechanism (at least 60%).
27
Thank you for your attention~
Yan LI
[email protected]
Academy of Chinese Energy Strategy, China University of Petroleum-Beijing,
18 Fuxue Road, Changping Dist., Beijing 102249, China