Analysis on the Imitation Effect of Investment Decisions in Internet Lending Market

Bo Yao

doi:doi:10.11648/j.jbed.20180303.15

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Analysis on the Imitation Effect of Investment Decisions in Internet Lending Market

Bo Yao

Published in Journal of Business and Economic Development (Volume 3, Issue 3)

Received: 15 October 2018 Accepted: 30 October 2018 Published: 29 November 2018

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Abstract

Nowadays, internet lending has become an important model that cannot be ignored in China financial lending market. Based on the individual transaction data of Chinese Paipaidai website, this paper examines the existence, rationality, decline and heterogeneity of the imitation effect of lenders’ investment decisions in China internet lending market. It is found that the potential lenders’ investment decisions imitation effect in the internet lending market is influenced by the previous cumulative bid times and the previous cumulative fundraising amount. With the decrease of information transmitted by the characteristics of imitation effect, the follow-up imitation effect of potential lenders will become more and more rational, and the imitative effect will gradually decrease and eventually disappear after reaching a certain peak value, furthermore, the lenders’ investment decision imitation effect of loan orders with poor information disclosure is more prominent than that of orders with perfect information disclosure. The research shows that the imitation effect of lenders’ investment decisions is mainly related to incomplete information disclosure in the internet loan market, and the paper’s outcome is important for us to exhaustively understand the risk accumulation caused by lenders’ investment decisions imitation effect and how to solve the information disclosure mechanism problem effectively.

Published in	Journal of Business and Economic Development (Volume 3, Issue 3)
DOI	10.11648/j.jbed.20180303.15
Page(s)	97-105
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2018. Published by Science Publishing Group

Keywords

Internet Lending, Investment Decisions, Imitation Effect, Loan Order

References

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[3]	Kumar, A., Lee, C. Retail Investor Sentiment and Return Comovements [J]. The Journal of Finance, 2006, 61 (5): 2451-2486.
[4]	Herzenstein, M., Dholakia, U. M., Andrews, R. L. Strategic Herding Behavior in Peer-to-Peer Loan Auctions [J]. Journal of Interactive Marketing, 2011, 25 (1): 27-36.
[5]	Shen, D., Krumme, C., Lippman, A. Fellow the Profit or the Herd? Exploring Social Effects in Peer-to-Peer Lending [C]. Social Computing, 2010 IEEE 2nd International Conference on ISBN, Houston: ISBN, 2010. 137-144.
[6]	Lee, E., Lee, B. Herding Behavior in Online P2P Lending: an Empirical Investigation [J]. Electronic Commerce Research and Applications, 2012, 11 (5): 495-503.
[7]	Zhang, J., Liu, P. Rational Herding in Microloan Markets [J]. Management Science, 2012, 58 (5): 892-912.
[8]	Chen, N., Han, C. A Comparative Study of Online P2P Lending in the USA and China [J]. Journal of Internet Banking and Commerce, 2012, 16 (2): 2-15.
[9]	Puro, L., Teich, J. E., Wallenius, H., et al. Bidding Strategies for Real-life Small Loan Auctions [J]. Decision Support Systems, 2011, 51 (1):31-41.
[10]	Chen Xiao. Research on the Cost of Private Lending——Empirical Analysis of Internet Lending based on P2P [J]. Journal of Finance Economics Research, 2014, (1):37-48.
[11]	Akerlof, G. A. The Market for “Lemons”: Quality Uncertainty and the Market Mechanism [J]. Quarterly Journal of Economics, 1970, 84 (3):488-500.
[12]	Stiglitz, J. E., Weiss, A. Credit Rationing in Markets with Imperfect Information [J]. American Economic Review, 1981, 71 (3):393-410.
[13]	Bester, H. Screening vs. Rationing in Credit Markets with Imperfect Information [J]. American Economic Review, 1985, 75 (4):850-855.
[14]	Barasinska, N., Schafer, D. Is Crowd-funding Different? Evidence on the Relation between Gender and Funding Success from a German Peer-to-Peer Lending Platform [J]. German Economic Review, 2014, 15 (4):436-452.
[15]	Li Yan, Gaoyijun, Li Zhenni, Cai Zihao, Wang Bingting, Yang Yuxuan. The Impact of Borrowers' Descriptive Information on Investors' Decision Making——Analysis of Internet Lending Platform based on P2P [J]. Economic Research Journal, 2014, (1):143-155.
[16]	Zhuang Lei, Zhou Qin. Identity Discrimination: Research on Internet Finance Innovation Efficiency [J]. Economic Management, 2015, (4):136-147.
[17]	Wu Zhiwei, Chen Ying. An Empirical Study on Factors Influencing Lenders' Loyalty in China's Securities Market [J]. Soft Science, 2010, (1):114-120.

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APA Style

Bo Yao. (2018). Analysis on the Imitation Effect of Investment Decisions in Internet Lending Market. Journal of Business and Economic Development, 3(3), 97-105. https://doi.org/10.11648/j.jbed.20180303.15

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ACS Style

Bo Yao. Analysis on the Imitation Effect of Investment Decisions in Internet Lending Market. J. Bus. Econ. Dev. 2018, 3(3), 97-105. doi: 10.11648/j.jbed.20180303.15

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AMA Style

Bo Yao. Analysis on the Imitation Effect of Investment Decisions in Internet Lending Market. J Bus Econ Dev. 2018;3(3):97-105. doi: 10.11648/j.jbed.20180303.15

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@article{10.11648/j.jbed.20180303.15,
  author = {Bo Yao},
  title = {Analysis on the Imitation Effect of Investment Decisions in Internet Lending Market},
  journal = {Journal of Business and Economic Development},
  volume = {3},
  number = {3},
  pages = {97-105},
  doi = {10.11648/j.jbed.20180303.15},
  url = {https://doi.org/10.11648/j.jbed.20180303.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20180303.15},
  abstract = {Nowadays, internet lending has become an important model that cannot be ignored in China financial lending market. Based on the individual transaction data of Chinese Paipaidai website, this paper examines the existence, rationality, decline and heterogeneity of the imitation effect of lenders’ investment decisions in China internet lending market. It is found that the potential lenders’ investment decisions imitation effect in the internet lending market is influenced by the previous cumulative bid times and the previous cumulative fundraising amount. With the decrease of information transmitted by the characteristics of imitation effect, the follow-up imitation effect of potential lenders will become more and more rational, and the imitative effect will gradually decrease and eventually disappear after reaching a certain peak value, furthermore, the lenders’ investment decision imitation effect of loan orders with poor information disclosure is more prominent than that of orders with perfect information disclosure. The research shows that the imitation effect of lenders’ investment decisions is mainly related to incomplete information disclosure in the internet loan market, and the paper’s outcome is important for us to exhaustively understand the risk accumulation caused by lenders’ investment decisions imitation effect and how to solve the information disclosure mechanism problem effectively.},
 year = {2018}
}

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TY  - JOUR
T1  - Analysis on the Imitation Effect of Investment Decisions in Internet Lending Market
AU  - Bo Yao
Y1  - 2018/11/29
PY  - 2018
N1  - https://doi.org/10.11648/j.jbed.20180303.15
DO  - 10.11648/j.jbed.20180303.15
T2  - Journal of Business and Economic Development
JF  - Journal of Business and Economic Development
JO  - Journal of Business and Economic Development
SP  - 97
EP  - 105
PB  - Science Publishing Group
SN  - 2637-3874
UR  - https://doi.org/10.11648/j.jbed.20180303.15
AB  - Nowadays, internet lending has become an important model that cannot be ignored in China financial lending market. Based on the individual transaction data of Chinese Paipaidai website, this paper examines the existence, rationality, decline and heterogeneity of the imitation effect of lenders’ investment decisions in China internet lending market. It is found that the potential lenders’ investment decisions imitation effect in the internet lending market is influenced by the previous cumulative bid times and the previous cumulative fundraising amount. With the decrease of information transmitted by the characteristics of imitation effect, the follow-up imitation effect of potential lenders will become more and more rational, and the imitative effect will gradually decrease and eventually disappear after reaching a certain peak value, furthermore, the lenders’ investment decision imitation effect of loan orders with poor information disclosure is more prominent than that of orders with perfect information disclosure. The research shows that the imitation effect of lenders’ investment decisions is mainly related to incomplete information disclosure in the internet loan market, and the paper’s outcome is important for us to exhaustively understand the risk accumulation caused by lenders’ investment decisions imitation effect and how to solve the information disclosure mechanism problem effectively.
VL  - 3
IS  - 3
ER  -

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Author Information

Bo Yao

National Academy of Economic Strategy, China Academy of Social Science, Beijing, China

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Plain Text BibTeX RIS

APA Style

Bo Yao. (2018). Analysis on the Imitation Effect of Investment Decisions in Internet Lending Market. Journal of Business and Economic Development, 3(3), 97-105. https://doi.org/10.11648/j.jbed.20180303.15

Copy | Download

ACS Style

Bo Yao. Analysis on the Imitation Effect of Investment Decisions in Internet Lending Market. J. Bus. Econ. Dev. 2018, 3(3), 97-105. doi: 10.11648/j.jbed.20180303.15

Copy | Download

AMA Style

Bo Yao. Analysis on the Imitation Effect of Investment Decisions in Internet Lending Market. J Bus Econ Dev. 2018;3(3):97-105. doi: 10.11648/j.jbed.20180303.15

Copy | Download

@article{10.11648/j.jbed.20180303.15,
  author = {Bo Yao},
  title = {Analysis on the Imitation Effect of Investment Decisions in Internet Lending Market},
  journal = {Journal of Business and Economic Development},
  volume = {3},
  number = {3},
  pages = {97-105},
  doi = {10.11648/j.jbed.20180303.15},
  url = {https://doi.org/10.11648/j.jbed.20180303.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20180303.15},
  abstract = {Nowadays, internet lending has become an important model that cannot be ignored in China financial lending market. Based on the individual transaction data of Chinese Paipaidai website, this paper examines the existence, rationality, decline and heterogeneity of the imitation effect of lenders’ investment decisions in China internet lending market. It is found that the potential lenders’ investment decisions imitation effect in the internet lending market is influenced by the previous cumulative bid times and the previous cumulative fundraising amount. With the decrease of information transmitted by the characteristics of imitation effect, the follow-up imitation effect of potential lenders will become more and more rational, and the imitative effect will gradually decrease and eventually disappear after reaching a certain peak value, furthermore, the lenders’ investment decision imitation effect of loan orders with poor information disclosure is more prominent than that of orders with perfect information disclosure. The research shows that the imitation effect of lenders’ investment decisions is mainly related to incomplete information disclosure in the internet loan market, and the paper’s outcome is important for us to exhaustively understand the risk accumulation caused by lenders’ investment decisions imitation effect and how to solve the information disclosure mechanism problem effectively.},
 year = {2018}
}

Copy | Download

TY  - JOUR
T1  - Analysis on the Imitation Effect of Investment Decisions in Internet Lending Market
AU  - Bo Yao
Y1  - 2018/11/29
PY  - 2018
N1  - https://doi.org/10.11648/j.jbed.20180303.15
DO  - 10.11648/j.jbed.20180303.15
T2  - Journal of Business and Economic Development
JF  - Journal of Business and Economic Development
JO  - Journal of Business and Economic Development
SP  - 97
EP  - 105
PB  - Science Publishing Group
SN  - 2637-3874
UR  - https://doi.org/10.11648/j.jbed.20180303.15
AB  - Nowadays, internet lending has become an important model that cannot be ignored in China financial lending market. Based on the individual transaction data of Chinese Paipaidai website, this paper examines the existence, rationality, decline and heterogeneity of the imitation effect of lenders’ investment decisions in China internet lending market. It is found that the potential lenders’ investment decisions imitation effect in the internet lending market is influenced by the previous cumulative bid times and the previous cumulative fundraising amount. With the decrease of information transmitted by the characteristics of imitation effect, the follow-up imitation effect of potential lenders will become more and more rational, and the imitative effect will gradually decrease and eventually disappear after reaching a certain peak value, furthermore, the lenders’ investment decision imitation effect of loan orders with poor information disclosure is more prominent than that of orders with perfect information disclosure. The research shows that the imitation effect of lenders’ investment decisions is mainly related to incomplete information disclosure in the internet loan market, and the paper’s outcome is important for us to exhaustively understand the risk accumulation caused by lenders’ investment decisions imitation effect and how to solve the information disclosure mechanism problem effectively.
VL  - 3
IS  - 3
ER  -

Copy | Download