Online peer-to-peer lending decision making: Model development and testing

Qingyao Wan1, Dongyu Chen2, Weihua Shi3
1School of Insurance , Shanghai Finance University, People’s Republic of China
2School of Management, Soochow University and Fuzhou University, People’s Republic of China
3College of Business, University of Southern Mississippi, United States
Cite this article:  Wan, Q., Chen, D., & Shi, W. (2016). Online peer-to-peer lending decision making: Model development and testing. Social Behavior and Personality: An international journal, 44(1), 117-130.

Volume 44 Issue 1 | e4881 | Published: February 2016 | DOI: https://doi.org/10.2224/sbp.2016.44.1.117

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We explored lenders’ decision-making processes in online peer-to-peer (P2P) lending by drawing on trust theory and the valence framework to develop an integrated decision- making model, which we then tested empirically using data from a survey conducted with 474 online lenders in China. The results showed that initial trust and perceived benefit determined willingness to lend, and that the fear of borrower opportunism did not have a significant impact on this willingness. Initial trust increased willingness to lend both directly and indirectly, increased it by increasing perceived benefit. We have identified the specific features of online P2P lending and provided valuable insights for borrowers, lenders, and intermediaries.

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