Title: Prosocial Compliance in P2P Lending: A Natural Field Experiment

Speaker: Associate Professor Ninghua Du, Shanghai University of Finance and Economics

Time: November 17th, 2017 13:30–14:45

Venue: Conference Room 106B, Zhonghui Building (College of Economics, JNU)

Abstract:

We implement behavioral mechanisms in a natural field experiment to increase loan repayment rates on a peer-to-peer (P2P) lending website. The results show that text message reminders conveying lenders’ positive expectations considerably increase the likelihood that borrowers will repay their loans, whereas reminders emphasizing the adverse consequences for those who fail to repay their loans do not. Our experiments result in an increase in loan repayments in the sample period, and our reminders are cost-free to implement, demonstrating the potential importance of such interventions in enhancing prosocial compliance in P2P lending.