A Study On The Overconfidence Of Investors In Online Lending And Its Influence

P2P network lending is a kind of financial innovation model combining Internet technology with private lending.It mainly focuses on small and short-term borrowing,and the transaction object is mainly individuals and small and medium-sized enterprises.Its essence is still private lending.Based on the transaction data of P2P platform "RenRenDai" and from the perspective of investors,this paper takes the investor turnover rate as the agent variable of overconfidence and adopts the fixed-effect model to conduct an empirical study on the overconfidence behavior of investors in online lending and the influence of the overconfidence behavior of investors on the return rate of investors.In this paper,the trading data of investors are first analyzed,and the results show that investors with high school degree or below and college degree are more likely to be overconfident.18-to 30-year-olds were more likely to be overconfident.Investors in the northeast are overconfident.Then,this paper further conducted an empirical study on the overconfidence of investors with different characteristics,and the empirical results were consistent with the statistical results.Secondly,this paper makes an empirical study on the effect of investors’ overconfidence on their return rate.The study found that overconfident investors will trade frequently and have a higher turnover rate,and a higher turnover rate will generate higher transaction costs to reduce their investment yield.That is,high transaction costs caused by frequent trading lead to low yields of overconfident investors.Based on this,this paper finally proposes suggestions to correct the investors’ behavior deviation and improve the investors’ income.