Analysis On The Impact Of Borrower's Reputation On Financing Behavior In P2P Network Lending

P2P network lending is a new type of financial service model,which is supported by Internet technology,through the effective matching of the needs of both sides of the loan,plays an important role in enhancing the universalization of financial services and promoting the development of the real economy.With the use of mobile Internet technology,more and more people begin to accept this new financing model.However,P2P network lending has efficiency problems in financing behavior,because the two sides are not in actual contact,there is a serious information asymmetry.The adverse selection and moral hazard of information asymmetry have seriously reduced the efficiency between the two sides.In the net loan market,the return(borrowing interest rates)of some poor borrowers is extremely high,the lender can't effectively identify their credit status.Based on the average market interest rate they are willing to lend,so that good borrowers will withdraw form market and then produce adverse selection problems.At the same time,due to the lacking of reasonable supervision mechanism,the borrowers who obtain funds will not effectively restrain their behaviors.It is easy to cause moral hazard problems,reducing the lender's lending will.Therefore,we need a perfect mechanism to alleviate the asymmetry of information in P2P network lending and improve the efficiency of financing behavior of both sides.Based on the game theory of reputation mechanism,this paper studies the financing behavior efficiency of P2P network lending.On the basis of literature about the factors that influence the financing behavior and effects that reputation plays,using the method of game theory,the paper deduces the theoretical mechanism of the borrower's reputation to solve the adverse selection and moral hazard in P2P network lending,and come up with two research hypotheses.On the basis of game analysis,using the transaction data of the renrendai,the paper analyzes the role of reputation on financing behavior from both the success rate of financing and the cost of financing.In the process of empirical research,the borrower's credit rating is used as a substitute variable to measure the reputation of the borrower.For the impact of the success rate of financing,because of its characteristics of binary variables,so use logical regression method.The impact of financing costs,use multiple regression method.The empirical results show that the reputation of the borrower has a significant impact on the success rate of financing and financing costs,confirming the role of reputation in the network lending.Finally,based on the above conclusions,this paper puts forward some suggestions to promote the development of network lending platform and improve the efficiency of financing behavior from three aspects of borrower,network lending platform and the government authority.