Individual Credit or Joint Reputation: Tackling Information Asymmetries in Online P2P Lending Markets

摘要

In online P2P lending markets, lenders and borrowers do not necessarily know each other. In order to reduce information asymmetries in the markets, the internct ventures not only work as the agency of lenders to collect and verify borrower’credit information, but also promote joint reputation group lending to stimulate borrowers’screening and monitoring each other. This paper aims to provide empirical evidence about whether both methods are working effectively in reducing information asymmetries in the markets. Due to the difficulty of measuring the effectiveness of the methods directly, we tested which information had been frequently used when lenders’make their lending decisions. The results show that credit information had a significant effect on the lending decisions, while group membership showed no significance at all. This implicates that joint reputation lending has not worked effectively as supposed in tackling information asymmetries in the online P2P lending markets.