Unité mixte de recherche 7235

Bids for Speed: An empirical Study of Investment Strategy Automation in a Peer-to-Business Lending Platform

Eric Darmon

We investigate how introducing a bidding agent impacts the process and outcome of an online reverse auction in the context of a crowdlending platform. We consider this issue in the context of a peer-to-business platform that connects individual lenders to small and medium-sized enterprises. Using a before/after study design, we perform an econometric analysis and find that introducing a bidding agent had a positive and dramatic impact on the number of bids and bidders and reduced the time necessary to collect the funds. For projects with lower ratings, it also positively impacted the number of lenders and indirectly enhanced portfolio diversification. We find that after the bidding agent was introduced, well-rated projects benefited from lower interest rates, the magnitude of the change depending positively on their rating. These results provide evidence that the bidding agent generates savings in the screening and bidding costs incurred by lenders and benefits both sides of the platform. Our contribution documents the role of bidding agent as a strategic tool to enhance financial intermediation. It also sheds light on how two types of decision support systems (rating-based and bidding agent) interact and shows that this interaction is of crucial importance with respect to the financial regulation of platforms if the crowd has low financial literacy.

AGENDA

jeudi 19 mai 2022

Lunch

Christophe Blot

Are all central bank asset purchases the same?

lundi 23 mai 2022

Law, Institutions and Economics in Nanterre (LIEN)

Clara Jean (Grenoble Ecole de Management)

The Value of Your Data: Privacy and Personal Data Exchange Networks

lundi 30 mai 2022

Law, Institutions and Economics in Nanterre (LIEN)

Antoine Dubus (ETH Zurich)

Salle G110

Data Driven Mergers and Acquisitions with Information Synergies

mardi 31 mai 2022

Series of Webinars on Economics of Environment, Energy and Transport (SWEEET)

Juan Pablo Montero (PUC)

TBA

jeudi 9 juin 2022

Lunch

Rémi Generoso

TBA

jeudi 9 juin 2022

Groupe de travail « Intelligence artificielle »

Hugo Le Picard (IFRI)

Salle G614B

Le deep learning au service de l’analyse des énergies renouvelables en Afrique

mardi 14 juin 2022

Series of Webinars on Economics of Environment, Energy and Transport (SWEEET)

Andrew Plantiga (UCSB)

TBA

mercredi 15 juin 2022

Économies du monde musulman

Amel Bouzid (CREAD, Alger)

Natural and Regulatory Underlying Factors of Food Dependency in Algeria

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