Expert imitation in P2P markets

Ge Gao, Mustafa Caglayan, Yuelei Li, Oleksandr Talavera

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Abstract

This paper investigates expert bidding imitation in peer-to-peer lending platforms. We employ data from Renrendai.com, which contains information of about 170,000 investors who placed almost four million bids on 111,234 loan listings from 2010 to 2018. The experts are defined as investors who either have more central roles or who spend more time or money on the network. We find that an average investor mimics the bids of expert lenders. Inactive lenders learn top investors’ lending behaviour through observational learning and then, follow their actions, although they do not know the experts’ identity. Finally, we show that experts rarely imitate other experts, yet they exhibit herding behaviour.

Original languageEnglish
JournalManchester School
Early online date13 Jun 2020
DOIs
Publication statusE-pub ahead of print - 13 Jun 2020

Keywords

  • big data
  • expert imitation
  • financial technology
  • network analysis
  • peer-to-peer lending

ASJC Scopus subject areas

  • Economics and Econometrics

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