Abstract Many firms use social media (SM) to solicit online investments. In this study, we examine the interaction between SM attributes and online-investment attributes to determine how this interaction shapes users’ investment decisions. Specifically, we investigate initial coin offerings (ICOs) as an application domain of distributed ledger technology for peer-to-peer investment. We use signaling theory to develop a context-specific explanation for how the interplay of persuasion signals found in SM and technology-enforced lockups shapes individuals’ ICO investment decisions. To evaluate this interplay, we conducted a 2 × 2 factorial experiment with 473 participants. The results show that when an investment does not require a technology-enforced lockup, persuasion signals encourage investments in ICOs; however, when an investment requires a technology-enforced lockup, persuasion signals do not affect investments in ICOs. Furthermore, our analyses suggest that combining a technology-enforced lockup and persuasion signals reduces the ICO’s plausibility. This is the first study to investigate how the willingness to invest in ICOs is influenced by the relationship between technology-enforced lockups and persuasion signals. The findings have practical implications for individuals attempting to make sound decisions on ICO investments, policymakers regulating online investments, and firms seeking to attract investors.


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    Title :

    The effect of lockup and persuasion on online investment decisions: An experimental study in ICOs



    Published in:

    Publication date :

    2023




    Type of media :

    Article (Journal)


    Type of material :

    Electronic Resource


    Language :

    English



    Classification :

    BKL:    85.40 Marketing / 83.72 Verkehrswirtschaft



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