Information Asymmetry And Herding Behavior In P2P Lending

In the last few years,with the support and promotion of our government of the"Internet plus" industry,the Internet finance has been developing rapidly and the online P2P lending is particularly eye-catching.P2P lending platform has low access threshold and convenient operation process,so the P2P lending is warmly welcomed by individual borrowers and small businesses once it spreads in China.Since the establishment of Ppdai in 2007,the P2P lending market has been growing explosively in the last few years.By the year of 2013,the number of P2P lending platforms has reached thousands.The number of P2P lending platforms is rapidly increasing,while the number of users and the volume of transactions on P2P platforms are shooting up.However,the whole transaction process of P2P lending is operated on the third party website and the Internet itself has the characteristics of anonymity and uncertainty,which arises the serious problem of asymmetric information between borrowers and lenders.In this paper,based on the problem of asymmetric information on P2P lending platforms,we selected the most representative P2P platform Ppdai in China.After reading adequate research literature about information asymmetry,herding behavior and P2P lending,we put forward the hypothesis and research model of this paper.Next,we grabed the real trasaction data of Ppdai platform.After some basic cleaning of the raw data,we gained the information of 1283 loan items and 23077 corresponding biddings.Finally,through the empirical analysis of the data,we found that the lenders has herding behavior in the bidding process,and there exists the"inverted U" relationship between the number of biddings and the decision making of lenders.In addition,we also analyzed the impact of information asymmetry on the lender herding behavior.We found that the degree of information asymmetry has a positive moderating effect on lenders' herding behavior.The higher the degree of information asymmetry of the loan project is,The more easily the herding behavior in the process of investment loans is arisen.