Problem: How does the information have a relationship with government bailouts? How does it connect with moral hazard?
"Strausz discusses in 2017 how crowdfunding provides innovation by allowing entrepreneurs to contract with consumers before their product is developed. Entrepreneurs can screen for worthwhile projects through crowdfunding under uncertain aggregate demand conditions, thereby improving investment decisions. Despite moral hazards and private information, optimal mechanisms perform this screening function. The welfare of society is thus promoted. Rather than replacing traditional venture capital, we see crowdfunding schemes as a complement to it since they are not efficient by themselves due to moral hazards and private cost information. Therefore, the two financing forms are expected to merge so venture capitalists can help reduce moral hazard, while crowdfunding platforms can evaluate projects more efficiently. Our analysis necessarily abstracts from many other relevant aspects. It makes several simplifying assumptions to focus on the trade-off between demand uncertainty and entrepreneurial moral hazard, which we view as fundamental first-order problems in crowdfunding."