Finance Brown Bag Seminar（2016-04）

Topic: Investments under Fast-Thinking: Evidence from Peer-to-Peer Lending

Speaker: Jun Yang, Indiana University

Time: Friday, 9 December, 11:30-13:00

Place: Room K01, Guanghua Hotel

Abstract:

Investment opportunities in the online peer to peer (P2P) lending market often disappear in a few minutes. It provides an ideal laboratory for testing the hypothesis that people are liable to make mistakes under fast-thinking (Kahneman 2011). Using one of the leading P2P lending platforms in China, Renrendai, we show that investors tend to pay too much attention to high interest rates and too little attention to high default risks under fast-thinking. Such biases in decision making result in higher default rates and poorer returns than expected. We further show that investors learn over time to convert from System 1 to System 2 thinking.

Introduction:

Dr. Jun Yang is an Associate Professor of Finance and ArcelorMittal USA Undergraduate Faculty Fellowship in Finance at Kelley School of Business, Indiana University.Her research interests areContracting, Corporate Finance, Corporate Governance, Executive Compensation. She holdsB.S. and M.S. in Management Information Systems from Tsinghua University. She earned PhD in Operations Management from the Chinese University of Hong Kong, and PhD in Finance from Washington University in Saint Louis.

//kelley.iu.edu/Finance/Faculty/page12594.cfm?ID=8593

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