An Empirical Study Of Bounded Rationality Investment Behavior And Decision Support Of Online P2P Lending In China

Online P2P lending platform is a place people can lend money to others. Its convenience,efficiency makes it developed rapidly in our country. However, online P2P lending is based on aninvestment model of the Internet and without collateral and guarantee, makes investors facegreater investment risk caused by asymmetric information, many investors make their owninvestment decisions by referring to the investment behavior of other investors, or directly followother investors to make the same investment decisions, resulting in a bounded rational investmentbehavior. The bounded rational investment behavior does not always play an active role in theprocess of P2P net-lending investment, investors need to build their own investment decisioncriteria to guide their investment behavior.This paper is mainly to verify the P2P bounded rational investment behavior. The boundedrational investment behavior is mainly herding. I build a multiple regression model within theshare in unit time of a bid, the rate and the investment duration to see if there is any existence ofherd behavior in the platform. The results showed that it does exist herd behavior in the process ofbiding in investors. Secondly, I explored factors that will have impact on this herd behavior, foundthe borrower’s loan term and credit score are the main factors affecting the herd behavior.Then, we use the "PaiPaiDai" Data to prove the bounded rationality of individual investorsthrough hypothesis testing, The result is also: Yes. The logistic regression model were establishedto find the influence factors of full bid rate and default rate, we found that investors take less careabout the age, whether there are loans, overdue times factors, but pay to much attention to theeducation, marital status, jobs and credit rating factors.Finally, we study investment decisions for investors of different risk preferences. First, I dosome work about investors classification based on the risk appetite during the process ofinvestment. I give different investment decision-making aids to them. Aggressive investors requirehighest income in this three and their risk tolerance is high, so they can choose a high average interest rate of the platform, promise high annual yield of borrowers, and a number of investmentprojects during appropriate funds that focus on high-yield investments. For conservative investors,they does not require high income compare to aggressive investors, and their risk tolerance isrelatively low, it is more appropriate to select lower average interest rate investment platform,promised lower annual yield of borrowers funds lending. More than making an investment projectis the appropriate dispersing funds for investment, increase the proportion of investment inlow-income and low-income projects platforms.For a single investment project, the paper discusses the impact of the nominal interest rateand loan term real interest rates. Investors should be conscious of the nominal interest rate toconvert this into a real interest rate according to the formula, if real interest rates is the same asbank deposit interest rate or other financial products, then the P2P lending project loses itsadvantages compared to bank project. According to the study, the loan term of online P2P lendingranges in1-6month will have a significant impact on the real interest rate, the longer the loanperiod, the lower the real interest rate, and when the loan period exceeds a certain length, realinterest rates did not change obviously. Therefore, investors in the choice of investment projectswithin the loan period for1-6months can make investment decisions based on the loan term, andwhen the loan exceeds the time period, investors should not consider the loan period for theearnings impact.