Social influence and defaults in peer-topeer lendingnetworks

Yong Lu, Bin Gu, Qiang Ye, Zhexiang Sheng

Research output: Chapter in Book/Report/Conference proceedingConference contribution

19 Scopus citations

Abstract

We assess social influence on borrowers' default decisions in a peer-to-peer lending market. Our analysis suggests that online borrowers are significantly influenced by defaults in their social networks. A friend's default decision more than doubles a user's default rate. We also find that not all friends have equal influences. The social influence is highly significant among online friends made through the peer-to-peer lending site. Social influence is much weaker in magnitude among offline friendships that were carried over to the peer-to-peer lending site.

Original languageEnglish (US)
Title of host publicationInternational Conference on Information Systems, ICIS 2012
Pages1797-1813
Number of pages17
StatePublished - 2012
EventInternational Conference on Information Systems, ICIS 2012 - Orlando, FL, United States
Duration: Dec 16 2012Dec 19 2012

Publication series

NameInternational Conference on Information Systems, ICIS 2012
Volume2

Other

OtherInternational Conference on Information Systems, ICIS 2012
Country/TerritoryUnited States
CityOrlando, FL
Period12/16/1212/19/12

Keywords

  • Empirical analysis
  • Peer-to-peer lending
  • Social influence

ASJC Scopus subject areas

  • Computer Science Applications
  • Statistics, Probability and Uncertainty
  • Applied Mathematics
  • Library and Information Sciences

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