The Role of "Expert Reviewers" in Private Capital Markets

The Role of "Expert Reviewers" in Private Capital Markets

Reena Aggarwal, Kathleen Hanley, Xaiofei Zhao

Series number :

Serial Number: 

Date posted :

March 15 2021

Last revised :

March 22 2021
SSRN Share


  • Private Markets • 
  • Information Asymmetry • 
  • Capital Raising • 
  • ICO • 
  • Fintech

We study initial coin offerings (ICOs) to understand how an unregulated market overcomes information frictions and conflicts of interest. Listing platforms both independently assess an offering and crowdsource information from "expert" reviewers.

These experts provide more balanced textual reviews as they gain experience and receive positive feedback from the community, consistent with a reputation effect. We find that proceeds are higher when reviews are more positive even after controlling for both the reviewer's and platform's numerical rating. Finally, experts with greater potential conflicts of interest are more positive than other reviewers, but investors identify these conflicts and discount their reviews.


Real name:
Kathleen Hanley
Real name:
Xaiofei Zhao