Competition Strategy Of Peer-to-Peer Lending Platforms In China

Peer-to-Peer lending(P2P)is the direct lending between individuals through internet-based platform.In theory,Internet technologies can make information spread efficiently and cheaply,which can reduce information asymmetry,so that investors can make wise judgments through information provided by platforms instead of relying on traditional financial institutions.Theoretically,P2P lending can increase investors'income,reduce credit rationing,and lead financial market closer to Pareto equilibrium.However,China's P2P platforms frequently outbreak risks,which have become an important source of risks in China's financial system.Reducing platform risks has become an urgent problem to be solved.Appropriate competition strategy,which can make platforms adapt to the changing market environment and gain advantages in competition,is an effective method to avoid risks.However,existing research mainly focuses on P2P lending risks and platform evaluation mechanism design.Few research focuses on the platform itself,especially on the platform's competitive strategy.P2P platform's competition strategy is constrained by the market structure and regulatory policy.The market environment of each country is different,so deepening the research on P2P platforms'competition strategy based on China's market environment promotes the China's financial road healthy development of the with characteristics.This dissertation is devoted to the research on P2P lending platforms'competition strategy under market structure and China's regulatory path.The main work and research results are as follows:1.The relationship between platform strategy and regulatory policy is studied.The regulatory path plays a decisive role in platforms' pattern,performance,risks and strategy.The differences among financial regulation of different countries form different P2P lending types.The research conclusions from other countries' P2P platforms may not applicable to China.Lack of regulation for a long period will lead to over-competition of platforms and increase risks.The waiting period between the promulgation and implementation of regulatory policies will have a significant impact on the performance of platform market.The regulatory policy of P2P network lending determines the scope of competitive strategies of platforms.Therefore,the research on regulatory path is the premise of P2P platforms' competition strategy research.2.China's P2P platform market is studied empirically.This dissertation finds that main characteristics' distribution of China's P2P platforms has a long tail,such as the number of borrowers and investors,volume etc.It is conluded that the mean and variance of platforms'distribution cannot represent most platforms.Therefore,empirical research results based on the assumption of normal distribution,such as linear regression,are different from the facts.Based on fitted distribution parameters of problem platforms and normal operation platforms,it is further found that platforms in P2P lending market have aggregation effect,and characteristics of platforms with different risks in China are dif-ferent,which makes regression algorithm unsuitable in overall market analysis.This dissertation proposes that clustering algorithm can be well applied to the China's P2P platform market research.The research based on clustering algorithm shows that scale is an important indicator of China's P2P platforms' risk.While,average borrowing rate,which used to indicate risk in theory,is not suitable for distinguishing platform risk.3.This dissertation studies China's P2P platform market structure,and empirically studies the size distribution and access threshold of China's P2P platform,to determine the platform's competitive strategy.The distribution of enterprise scale in the market reflects overall growth and dynamic evolution of the market,industrial concentration and economic cycle level.Then the access threshold of the market can be obtained.Empirical results show that China's P2P platforms are currently in monopolistic competition,and lognormal distribution is more likely to be the size distribution of platforms overall.Large platforms' size distribution is closer to power-law distribution,while the size distribution of small platforms does not have the characteristics of power-law distribution.Therefore,China's P2P platforms market scale distribution is unbalanced.Resources are centralizing to large-scale platforms.The P2P platform market has implicit access threshold.4.This dissertation studies entry strategy,differentiation strategy and pricing strategy of P2P platforms under China's P2P platform market structure and regulatory path.This dissertation combines information asymmetry with bilateral market theory,and establishes user utility function on revenue expectation and network externality.With the differences market environment between initial stage and intense competition stage of China's P2P platform market,growth rate model and Hotelling model based on utility function is established seperatedly,to analyze the influence of platform's initial size,borrowing quality,platform's basic services and users' expectations on the platform competition strategy.5.Competition strategy of multi-platform cooperation is studied.Big data technology is applied to analyze the massive data of the P2P platforms to optimize the overall control of multiple platforms' performances,thus providing strategic support for the merger and regulation of P2P platforms.At present,multi-platforms collaborative control lacks methodologies in China's regulation department and decision-making departments of P2P platforms.The data of P2P platforms has not been effectively utilized,and the collaboration mode among multi-platforms is relatively simple.Inductive method and reverse iteration method are implemented,and adaptive control theory is used to establish multi-platform cooperation competition strategies based on market scale and default rate respectively according to the differences of waiting period between policy launch and implementation in this dissertation,thus optimizes the overall performance and improves the stability of multi-platform.The innovations of this dissertation are as follows:1.This dissertation studies P2P platform market structure.The platform market structure is the basis of the research on P2P platform's competition strategy.This dissertation empirically finds that China's P2P platform market is monopolistic competition,which is different from the common hypothesis of monopoly or oligopoly.This is this dissertation content innovation.2.This dissertation establishes a bilateral market model based on information asymmetry,considering the characteristics of two-sided market attributes and information asymmetry.This is this dissertation's main innovation in theory.3.In this dissertation,a multi-platform cooperative strategy model is established based on adaptive control theory,to meet the requirements of P2P platform's merger and regulation.The overall performance optimization and stability improvement of multi-platform are realized.This is this dissertation's methodology innovation.4.This dissertation presents a clustering algorithm to study China's P2P platform market.By fitting the parameters of the P2P platform market,this dissertation finds that the Chinese P2P platform is aggregated,and demonstrates that the classification of the platform market is the premise of China's P2P platforms' competitive strategy research.This is this dissertation's another methodology innovation.5.This dissertation finds that linear regression is not applicable to the empirical research of P2P platforms.Statistical characteristics of P2P platform market should be tested,and the data period must match the research stage in empirical research.This is this dissertation's empirical methodology innovation.