Rational Herding in Microloan Markets

Juanjuan  and Zhang,Peng Liu  proposed a study regarding herding bahaviour in P2P market by using data from Prosper.com and found evidence regarding lenders’ herding behaviour. Well-funded borrower listings tend to attract more funding, lenders engage in active observational learning (rational herding) and follow-up analysis shows that rational herding beats irrational herding in predicting loan performance.

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