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The Dark Side of Machiavellian Rhetoric: Signaling in Reward-Based Crowdfunding Performance

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Abstract

In this study, we explore the impact of Machiavellian rhetoric on fundraising within the increasingly important context of online crowdfunding. The “all-or-nothing” funding model used by the world’s largest crowdfunding platform, Kickstarter, may be an attractive context in which entrepreneurs can utilize Machiavellian rhetoric to reach their funding goal, lest they get no funding at all. This study uses data from 76,847 crowdfunding projects posted on kickstarter.com and develops a dictionary for computer-aided text analysis (CATA) of Machiavellian rhetoric to measure the relationship between the frequency of Machiavellian rhetoric use and crowdfunding performance, operationalized as either reaching a funding goal or the number of backers who funded the project. Machiavellian rhetoric is segregated into eight facets, which are categorized into hard and soft influence tactics. Hard tactics include revenge, intimidation, betrayal, and manipulation. Soft tactics include ingratiation, supplication, self-disclosure, and persuasion. Results reveal that signals of revenge, self-disclosure, and intimidation have negative effects, whereas signals of ingratiation and persuasion have mixed positive effects on crowdfunding performance. Ingratiation is found to increase the number of backers, but not funding success. Conversely, persuasion is found to increase funding success, but not the number of backers. Surprisingly, betrayal rhetoric is positively related to both measures of crowdfunding performance. Thus, this article complements the literature on backer decision-making, entrepreneurial methods, reward-based crowdfunding, and ethics in entrepreneurship by demonstrating how the displays of potentially negative phenomena, such as Machiavellianism, have complex consequences for entrepreneurial outcomes.

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Notes

  1. https://www.merriam-webster.com/dictionary/Machiavellianism

  2. https://www.reviewed.com/laundry/features/crystal-wash-tested-does-this-detergent-alternative-actually-work

  3. https://www.kickstarter.com/projects/tiko3d/tiko-the-unibody-3d-printer

  4. https://www.kickstarter.com/projects/1998516523/justice-my-horrific-experience-with-autism-and-cps/

  5. https://www.kickstarter.com/environment

  6. https://www.kickstarter.com/projects/708507790/protest-to-prosperity-occupy-wall-street-pamphlet/

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Acknowledgements

We thank Anton Shevchenko for his outstanding support with an early draft and three anonymous reviewers for their clear and thoughtful comments. We also thank Moren Lévesque for her advice and section editor Julia Roloff for her invaluable guidance and support. This work was supported by The Social Sciences and Humanities Research Council of Canada Insight Development Grant No. 430-2017-00610.

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  1. DeGroote School of Business, McMaster University, 1280 Main Street West, Hamilton, ON, L8S 4M4, Canada

    Goran Calic & Maryam Ghasemaghaei

  2. Hill School of Business, University of Regina, 3737 Wascana Pkwy, Regina, SK, S4S 0A2, Canada

    Rene Arseneault

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Appendices

Appendix

Description and Validation of Machiavellian Rhetoric Measure

McKenny et al. (2013) developed and validated a combined deductive/inductive method to conduct Computer-Aided Text Analysis (CATA). This approach has been particularly useful for the analysis of long texts or samples with a large number of texts, such as in crowdfunding research (Anglin et al., 2018a, b; Calic & Shevchenko, 2020). To start, we specified the theoretical nature of Machiavellianism to define the eight facets and developed deductive word lists associated with each construct. Next, we generated synonyms for each word in the deductively generated list and validated the generated list of words. This resulted in a list of deductively generated words for each facet. To inductively developed a new list of words, we started by using Python software to extract a list of the most commonly used words in crowdfunding project descriptions. From this list, we extract words associated with each facet of Machiavellianism. A combined list of words was refined by a discussion of potential words identified using both the deductive and inductive approach until all authors agreed that a particular word could be expected to meaningfully relate to the construct of interest. As a final verification, all crowdfunding project descriptions in our sample were analyzed using Python Natural Language Tool Kit (NLTK) library for word occurrences from our dictionaries. We then manually evaluated the highest-scoring campaigns for each dictionary. Manual analysis revealed additional words that were added, and in other, it resulted in the removal of words. We repeated this process for the 50 highest ranked campaigns until no further refinement of the dictionaries was possible. For a graphical presentation of the framework used to construct the dictionaries, please see Fig. 1 (see Table 4).

Table 4 Machiavellian rhetoric words
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Calic, G., Arseneault, R. & Ghasemaghaei, M. The Dark Side of Machiavellian Rhetoric: Signaling in Reward-Based Crowdfunding Performance. J Bus Ethics 182, 875–896 (2023). https://doi.org/10.1007/s10551-021-04984-0

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