Study Of Reputation Mechanism Of P2P Lending Platforms In China

It is a worldwide problem that most small and medium enterprises hard to financing and they also need to bear the higher cost.The reason both for their own business,but also have the fact that our countries' capital market system is not sound.In this environment Internet Finance came into being and experienced rapid development.It will be an effective complement to the traditional financial industry,but also bring the impact and challenges to the industry.Therefore,the study of its model,mechanism and trend has important theoretical and practical significance.People generally agree on the concept of Internet Finance is the use of Internet Technology,including Internet Thinking on the financial industry to bring the integration and gradual change.Its goal is to get rid of financial and realize the optimization of resource allocation.This paper defined Internet Finance from the perspective of the basic functions of the bank in the Internet Financial development and the impact of network information technology on the traditional financial model as a new service model which based on the emerging platform economic rules,use modern information technology,through innovative financing payment and settlement to achieve efficient allocation of financial resources.Compared with the traditional financing,the most significant characteristics of Internet financing are: information asymmetry reduced by the application of big data;Internet platform improved the efficiency of resource allocation;the development of network financing has promoted the realization of Inclusive Finance.In the environment of China's new normal,"Internet +" has become a new engine to drive economic development.Internet finance has made the two leading industries to penetrate each other,and the situation of competition and cooperation coexistence has been formed.From the perspective of research,financing theory,platform economy and reputation mechanism are three important observation points.As a discipline,Finance mainly focus on both macro and micro level to study the relationship between finance & investment and the social economics development.With the development of information economics and institutional economics,the theory of financing demand and supply is becoming more and more abundant.These theories have important guiding significance in the study of Internet loan.As a new economic form,Platform economy has been widely present in modern society.Platform economy is a bilateral or multilateral market,with value-added,network externalities and openness etc.characters.Domestic and foreign theoretical research on platform economics has just started.The original meaning of reputation is the evaluation of someone,more than 200 years ago,Adam Smith believes that reputation is an important mechanism to ensure the honest implementation of the contract.The research of reputation and the application related to reputation is a hot topic in the field of modern economic management,and has formed three major theories of the standard reputation,reputation transactions and reputation information,after that,the reputation of incentive theory and reputation network theory also have a greater impact.The empirical study of reputation theory mainly focuses on the impact of reputation on prices under different market characteristics.From the perspective of the core function of finance,Internet Finance and Crowdfunding are two kinds of innovative modes of using the Internet to realize inclusive financing.With the P2 P network loan platform continuous development,different business model and risk control mechanism start to appear.Some of the taste of the P2 P model implies a huge risk.The national regulatory authorities have promulgated the relevant provisions,clearly guide the P2 P network loan platform to the information intermediary direction,to help achieve P2 P platform only be an information display and match the transactions.However,P2 P guarantee mode will still exist in the short term.The study of reputation in academia began in the 1970 s,and the reputation has social,comprehensive,historical and fragile characterizes."Reputation mechanism" can be understood as a self-implementation process of reputation in a reputation system that does not require external means,it includes residual production,impact,retention,consumption,and transactions.The role of the reputation mechanism requires basic conditions,process conditions and outcome conditions,corresponding to time,information and rights.The reputation of the borrower in the P2 P network loan platform is composed of three parts,the basic characteristics of the borrower,such as age,sex,unit,family marital status and so on;The borrower's historical loan performance reflects the repayment of the borrower in the lending market History;other indicators,such as personal behavior in the circle of friends.The role of the reputation mechanism must first meet the basic conditions of repeated game or related game,secondly,in the net loan platform transaction,the platform should promptly pass the default of the borrower to all stakeholders;Thirdly,in terms of the punishment of dishonesty,one is the spontaneous effect of the market mechanism,the other is the mandatory punishment of the law.Compared with the traditional folk borrowing,there are essential differences in social relations,trust mechanism and punishment mechanism.Through the analysis of the typical foreign P2 P platform,we can see that the "reputation mechanism" is based on the perfect credit system,so according to our country's situation,this paper puts forward the following suggestions:(1)Building a reputation mechanism for China's national conditions;(2)Establishing a unified credit evaluation mechanism;(3)Promoting credit information sharing;(4)Building a network lending "acquaintance circle";(5)Focus on the platform "cattle" behavior.Through the static and dynamic game analysis of both borrowing and lending side on P2 P platform,we can see that:(1)if the borrower's expected return on repayment is greater than the short-term gain of default,then the borrower will choose to repay,and the long-term reputation mechanism can be established.(2)In the case of incomplete information,the borrowers and the lenders do not understand each other's thought,investors can only make a priori judgment.With the game carry on,investors can adjust their posterior probability according to the borrower's behavior,and this adjustment is the formation process of reputation.The research shows that the reputation mechanism can restrain the behavior of rational borrowers on P2 P platform.(3)The borrower is affected by the following three factors in weighing the pros and cons of default:default cost,time factor and reputation transmission mechanism.On the basis of qualitative analysis and theoretical discussion and the public investment mentality and investor risk preference anticipation,this paper takes PPDAI as an example,with the lender's information and P2 P loan platform on the basic behavior,has built a Key Factor Model of Investment Interest Rate Selection in Lending Platform.The following conclusions were obtained by multiple linear regression analysis:(1)An older platform or a longer registration time means a more experienced lender,who is more willing to invest in higher-paying projects.(2)The degree of self-certification of the lender has a positive impact on the choice of its investment interest rate.(3)Higher "Loans-The total number of repayments" means the lenders tend to invest in higher-interest-rate projects.(4)The cumulative total investment is the main factor affecting the choice of lender's investment interest rate on the platform,while the stage of investment frequency is not a key factor.(5)Investors with a certain risk appetite do not change their preferences because of the failed investment on the platform,where investors have a certain irrationality.In this paper,the concept of "reputation" and "reputation mechanism" in economics study is applied to the emerging online lending platform,which defines the composition of "reputation" in P2 P online loan,and analyzes the process of its reputation mechanism and the conditions of its occurrence.Comparing the fundamental differences between conventional individual loan and emerging online lone in reputation mechanism.On the other hand,from the perspective of game theory,this paper systematically analyzes the mechanism and contributing factors of the reputation mechanism.Through the establishment of the loan game model,the reputation mechanism is introduced into the loan analysis process,and the paper puts forward the normative and prudential supervision of the P2 P loan model credit rating and information disclosure system and other recommendations.Because P2 P network borrowing platform is a newborn in the Internet era,the research on its reputation is both a collective reputation as a corporate perspective and a personal reputation of such special groups on the platform.The research on the theoretical model of the reputation of the lender on the platform is also very scarce.The empirical research focuses on the influence of the reputation on the other variables such as the price and the success rate,not the mechanism of the reputation itself.The empirical or experimental test of the theoretical model is rarer,which are to be further studied in the future.