Pricing Research Of Peer To Peer Online Lending

With the development of the Internet technology,P2P online lending has been booming in the world.P2P online lending makes up the shortage of formal financial institutions for its convenience,relatively low-threshold,simpleness and wins the appreciation in domestic and overseas.Moreover,P2P online lending attracts investment of VC companies,State-owned Enterprises and Banks.Therefore,the research on P2P online lending has important practical significance.P2P online lending is a typical bilateral market.There are borrowers and lenders who deal in the platform.Pricing of P2P online lending is an important part of the platform operation,and pricing mechanisms affect the size and development of the platform.The platforms need to make a reasonable pricing to maximize the profit and scale of the platform.By applying Two-sided market theory to pricing of P2P online lending and introducing Intra-group network externality into the standard Hotelling model under the duopoly competition,this paper analyses pricing issues of P2P online lending that has three kinds of market structures including both sides as single-homing,borrowers as single-homing and lenders as partial multi-homing and both sides as partial multi-homing.In this paper,we look for the pricing rules,theoretical basis in pricing and reasons of asymmetric pricing,and make relevant recommendations by theoretical research and numerical simulation.This paper also combines the practical cases to analyze the conclusions and make suggestions.The main conclusions of this paper:(1)Introducing Intra-group network externality in the Hotelling model can effectively reduce platform's pricing for borrowers and lenders.(2)Expanding the degree of differentiation between platforms can increase platform's revenue.(3)If borrowers and lenders all only join one P2P online lending,the platform will make the same pricing to borrowers and lenders,otherwise it won't happen.This paper makes suggestions to the development of P2P online lending:(1)Building forums and groups of friends is very useful to enhance communication between users.Doing this not only can reduce users' cost,but also can reduce their risk and improve their credit rating.For P2P online lending,it can expand the size of the market.(2)In the development process,platforms need to continuously introduce new services and new models,and improve return by improving the degree of differentiation with other platforms.