Underlying Information Driven And P2P Lending Herd Behavior Research

P2P network lending rely on Internet technology to make the operation of the two sides of the investment and financing behavior become easier and faster,but at the same time,there is the problem of asymmetric information,the same as other Internet financial products,it is easy to lead to the occurrence of herd behavior in the investment process.Different herd behavior will bring different market impact.It can not only promote the rapid development of emerging markets,but also exacerbate market losses,so that individual investors into a scam or chain risk.Therefore,in order to promote the healthy development of P2P lending market,it is necessary to study the nature and the underlying P2P network lending herding behavior driving mechanism to supplement and perfect the existing theory and to provide the basis for the development of internet financial risk management system.In this paper we analyze the nature and the underlying information driven mechanism of P2P lending herd behavior using Chinese PPDAI as an example.We first test the nature of the herd behavior in Chinese P2P lending market,using the participation rate and participation numbers as an explained variables according to the FSS short-term equilibrium assumption of herding behavior and the improved MNL model.Then,basing on the classification of P2P lending market information,we study the underlying information driven mechanism behind the herding behavior.The empirical results show that when the market share is measured in terms of bids,the impact of the current participation rate and the current participation bids on the explanatory variables was significantly positive at 0.1%,which confirm the existence of herd behavior in the process of Pat loan;when we measure the market share with the tender amount,we find that the current participation rate has no significant effect on the explanatory variables,and the impact of the current participation bids on the explanatory variables is still significantly positive at 0.1%.As a result,we judge the existence of herd behavior in China's P2P net loan market,but it is cautious herd behavior.Then,it is found from the empirical analysis that the underlying information driven factors of the herd behavior in Chinese P2P lending market are the platform information,the project information and the borrower information in turn.The policy implication of this paper is that the P2P lending market in China will not cause market risk due to investors' herd behavior,financial regulation and mechanism design should focus on improving investor protection,P2P lending platform of credit evaluation and disclosure system.