A Study of Risk-Based Pricing in Peer-to-Peer Lending

dc.contributor.advisor Huang, Wei
dc.contributor.author Wang, Xinruo
dc.contributor.department Business Administration
dc.date.accessioned 2020-07-07T19:09:17Z
dc.date.available 2020-07-07T19:09:17Z
dc.date.issued 2020
dc.description.degree Ph.D.
dc.identifier.uri http://hdl.handle.net/10125/68956
dc.subject Finance
dc.subject auctions
dc.subject credit risk
dc.subject peer-to-peer lending
dc.subject posted prices
dc.subject pricing regimes
dc.subject risk-based pricing
dc.title A Study of Risk-Based Pricing in Peer-to-Peer Lending
dc.type Thesis
dcterms.abstract This study examines how efficiently the credit risk is priced in interest rates under the two most commonly used pricing mechanisms – auctions and posted prices – in the peer-to-peer lending industry. By exploring a unique pricing mechanism switch on an online lending platform, Prosper.com, I find, under the posted prices, the loan pricing is less sensitive to credit risk; the platform collects higher profits; lenders are less compensated for the credit risk taken; and borrowers experience less credit rationing. I argue that less risk-based pricing results from different stakeholder incentives. This study is the first to explore the risk-based pricing in online credit markets. While the main analysis is based on Prosper’s pricing regime choice, the findings generalize well to other peer-to-peer lending platforms and have important relevance in today’s global peer-to-peer lending market.
dcterms.extent 72 pages
dcterms.language eng
dcterms.publisher University of Hawai'i at Manoa
dcterms.rights All UHM dissertations and theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission from the copyright owner.
dcterms.type Text
local.identifier.alturi http://dissertations.umi.com/hawii:10647
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