Institute for Economic and Social Research Seminar (No.72)

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

Date：November 17, 2017 

Time: 2:00 p.m.-3:15 p.m.

Venue: Meeting room 106B，Zhonghui Building

Speaker: Du Ning-hua, Shanghai University of Finance and Economics

Sponsor: JNU's Institute for Economic and Social Research   

ABOUT DU NING-HUA

Du Ning-hua is Assistant Professor of School of Economics, Shanghai University of Finance and Economics. He obtained his Ph.D. in Economics from the University of Arizona in 2005. His main research interests are experimental economics and behavioral economics. He concentrates on the study of behavioral marketing design in recent years. His research achievements were published in first-class international economic journals including Games and Economic Behavior，European Economic Review, and well-known international journals of economics and management including Journal of Economic Behavior and Organization, Decision Support Systems. 

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.