Predicting and Deterring Default with Social Media Information in Peer-to-Peer Lending

• 成果类型: Article
• 署名作者: Ge, Ruyi; Feng, Juan; Gu, Bin; Zhang, Pengzhu
• 署名单位: Shanghai Business School; City University of Hong Kong; Arizona State University; Arizona State University-Tempe; Shanghai Jiao Tong University
• 刊物名称: JOURNAL OF MANAGEMENT INFORMATION SYSTEMS
• ISSN/ISSBN: 0742-1222
• DOI: 10.1080/07421222.2017.1334472
• 发表日期: 2017
• 页码: 401-424
• 关键词: propensity score; IMPACT; community; networks; BEHAVIOR; MARKETS; MODEL

摘要

This study examines the predictive power of self-disclosed social media information on borrowers' default in peer-to-peer (P2P) lending and identifies social deterrence as a new underlying mechanism that explains the predictive power. Using a unique data set that combines loan data from a large P2P lending platform with social media presence data from a popular social media site, borrowers' self-disclosure of their social media account and their social media activities are shown to predict borrowers' default probability. Leveraging a social media marketing campaign that increases the credibility of the P2P platform and lenders disclosing loan default information on borrowers' social media accounts as a natural experiment, a difference-in-differences analysis finds a significant decrease in loan default rate and increase in default repayment probability after the event, indicating that borrowers are deterred by potential social stigma. The results suggest that borrowers' social information can be used not only for credit screening but also for default reduction and debt collection.