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Expert Imitation in P2P Markets

Author

Listed:
  • Ge Gao

    () (University of Birmingham)

  • Mustafa Caglayan

    () (Heriot-Watt University)

  • Yuelei Li

    () (Tianjin University)

  • Oleksandr Talavera

    () (University of Birmingham)

Abstract

This paper investigates expert bidding imitation in peer-to-peer lending platforms. We employ data from Renrendai.com, which contains information about 169,779 investors who placed 3,947,996 bids on 111,284 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.

Suggested Citation

  • Ge Gao & Mustafa Caglayan & Yuelei Li & Oleksandr Talavera, 2020. "Expert Imitation in P2P Markets," Discussion Papers 20-10, Department of Economics, University of Birmingham.
  • Handle: RePEc:bir:birmec:20-10
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    File URL: http://www.repec.bham.ac.uk/pdf/20-10.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Peer-to-Peer Lending; Network Analysis; Expert Imitation; Big Data; Financial Technology;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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