  Crowdfunding is gradually becoming a modern marketing pattern. By noting that
the success of crowdfunding depends on network externalities, our research aims
to utilize them to provide an applicable referral mechanism in a
crowdfunding-based marketing pattern. In the context of network externalities,
measuring the value of leading customers is chosen as the key to coping with
the research problem by considering that leading customers take a critical
stance in forming a referral network. Accordingly, two sequential-move game
models (i.e., basic model and extended model) were established to measure the
value of leading customers, and a skill of matrix transformation was adopted to
solve the model by transforming a complicated multi-sequence game into a simple
simultaneous-move game. Based on the defined value of leading customers, a
network-based referral mechanism was proposed by exploring exactly how many
awards are allocated along the customer sequence to encourage the leading
customers' actions of successful recommendation and by demonstrating two
general rules of awarding the referrals in our model setting. Moreover, the
proposed solution approach helps deepen an understanding of the effect of the
leading position, which is meaningful for designing more numerous referral
approaches.
