Expert imitation in P2P markets. (13th June 2020)

• Record Type: Journal Article
• Authors: Gao, Ge; Caglayan, Mustafa; Li, Yuelei; Talavera, Oleksandr
• Is Part Of: Manchester school. Volume 89:Number 5(2021)
• Page Start: 470
• Page End: 485
• Publication Date: 2020-06-13
• Subjects: peer‐to‐peer lending -- network analysis -- expert imitation -- big data -- financial technology; Economics -- Periodicals; Social sciences -- Periodicals; Economics -- Sociological aspects -- Periodicals; 330.05
• DOI: 10.1111/manc.12321
• Languages: English
• ISSNs: 1463-6786

Abstract

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.