Academic Journal
A computational model of the effects of borrower default on the stability of P2P lending platforms
| العنوان: | A computational model of the effects of borrower default on the stability of P2P lending platforms |
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| المؤلفون: | Katsamakas, Evangelos, Sánchez Cartas, Juan Manuel |
| بيانات النشر: | Springer |
| سنة النشر: | 2024 |
| المجموعة: | Universidad Complutense de Madrid (UCM): E-Prints Complutense |
| مصطلحات موضوعية: | D39, G20, G23, M10, Fintech, Digital platform, Platform stability, Peer-to-peer lending, Digital financial service, Network structure, Network effect, Network collapse, Finanzas, Economía industrial, 5309 Organización Industrial y Políticas Gubernamentales |
| الوصف: | 2024 Acuerdos transformativos CRUE ; Peer-to-peer (P2P) lending has attracted scholarly attention because of its economic significance and potential to democratize access to finance. However, P2P lending platforms face many challenges and failures that we need to understand more clearly. We build a computational model to study how borrower default affects P2P platform lending. We show that borrower default disrupts the P2P network formation process and undermines platform stability. Moreover, we find that defaults increase the inequality in accessing funding and provide a rationale for using curation rules, widely used in P2P platforms, in contrast to P2P insurance, which fosters cascading defaults. We also address a new trend in P2P lending platforms in which large companies (institutional investors) play an increasingly important role. We f ind that the presence of large companies creates a denser network (more loans) but generates a trade-off between making the platform more resilient to cascading defaults and more dependent on specific players. Overall, we explain how borrower defaults affect platform stability and what makes a platform vulnerable, threatening its survival. We discuss research and managerial insights into platform stability and the economic effect of P2P lending platforms. ; Depto. de Análisis Económico y Economía Cuantitativa ; Fac. de Ciencias Económicas y Empresariales ; TRUE ; pub ; APC financiada por la UCM |
| نوع الوثيقة: | article in journal/newspaper |
| وصف الملف: | application/pdf |
| اللغة: | English |
| تدمد: | 2147-429X |
| Relation: | https://hdl.handle.net/20.500.14352/103950; Katsamakas, E., Sanchez-Cartas, J.M. A computational model of the effects of borrower default on the stability of P2P lending platforms. Eurasian Econ Rev (2024). https://doi.org/10.1007/s40822-024-00280-0; https://doi.org/10.1007/s40822-024-00280-0 |
| DOI: | 10.1007/s40822-024-00280-0 |
| الاتاحة: | https://hdl.handle.net/20.500.14352/103950 https://doi.org/10.1007/s40822-024-00280-0 |
| Rights: | open access |
| رقم الانضمام: | edsbas.10C86872 |
| قاعدة البيانات: | BASE |
| تدمد: | 2147429X |
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| DOI: | 10.1007/s40822-024-00280-0 |