Author Topic: Can't ask questions?  (Read 5349 times)

Jomar

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Can't ask questions?
« on: March 20, 2014, 09:23:53 AM »
The preset questions seem to have disappeared on the browse notes page.  Anyone else having this issue this morning? 

Not that it matters much since most borrowers don't bother answering them any more.  I probably wouldn't either if I knew my loan would be funded in a matter of minutes (or seconds) with or without me volunteering personal information.

Lovinglifestyle

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Re: Can't ask questions?
« Reply #1 on: March 20, 2014, 07:44:31 PM »
I hadn't noticed the questions were gone until you wrote about it this morning!  I noticed there weren't any answers, and that the window stopped moving, but that's all.  Now I'm noticing that I haven't seen any written descriptions all day, although the box is still there.  Could only find words on the older notes, but that could be circumstantial.

I actually asked some questions yesterday since the notes were hanging around longer. 

Hopefully they'll be back!

PeerSocialLending

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Re: Can't ask questions?
« Reply #2 on: March 20, 2014, 09:39:40 PM »
-Ryan
p2p lending blogger @ www.peersociallending.com

Lovinglifestyle

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Re: Can't ask questions?
« Reply #3 on: March 20, 2014, 10:16:02 PM »
Thanks, PSL!  I forget the blog even exists, let alone go looking for it.

Well, that's just great.  So much for the people-to-people part.  Now we can call it # to # Lending.


PeerSocialLending

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Re: Can't ask questions?
« Reply #4 on: March 20, 2014, 11:52:59 PM »
I have it in my RSS feed which is the only reason I saw it. I don't think it's a surprising change and it is certainly a sign of Lending Club maturing.  No longer will investors be able to invest (or not) based on spelling.

Some day we will reminisce about the good ol' days when Lending Club let you grill the borrowers...
-Ryan
p2p lending blogger @ www.peersociallending.com

Jomar

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Re: Can't ask questions?
« Reply #5 on: March 21, 2014, 10:16:53 AM »
Thanks for the link, PSL.  I guess the next logical step after removing free-form questions was removing free-form answers, but it's still disappointing.  For me it wasn't about spelling, it was spotting and avoiding borrowers obviously didn't care a lick about how they presented themselves to the people who were loaning them thousands of dollars.  To me, that's a red flag. 

Oh well, on to the age of pure anonymity and auto-populated data...

Emmanuel

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Re: Can't ask questions?
« Reply #6 on: March 21, 2014, 11:14:14 AM »
For me it wasn't about spelling, it was spotting and avoiding borrowers obviously didn't care a lick about how they presented themselves to the people who were loaning them thousands of dollars.  To me, that's a red flag. 

Based on the suggestion of one of of users, we tested a language analysis algorithm to establish an 'English correctness' score for each loan application. Oddly enough, such score was poorly but negatively corrected with returns. Said otherwise, people who 'didn't care a lick' seemed to be, on average, slightly better borrowers! Like you, I would have guessed the opposite.

Bohb Daishi

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Re: Can't ask questions?
« Reply #7 on: March 24, 2014, 02:11:37 AM »
For me it wasn't about spelling, it was spotting and avoiding borrowers obviously didn't care a lick about how they presented themselves to the people who were loaning them thousands of dollars.  To me, that's a red flag. 

Based on the suggestion of one of of users, we tested a language analysis algorithm to establish an 'English correctness' score for each loan application. Oddly enough, such score was poorly but negatively corrected with returns. Said otherwise, people who 'didn't care a lick' seemed to be, on average, slightly better borrowers! Like you, I would have guessed the opposite.

That's very counter-intuitive. I can't really think of a good explanation, either.
There are three ways to make a living in this business: be first, be smarter, or cheat.

AnilG

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Re: Can't ask questions?
« Reply #8 on: March 24, 2014, 03:20:33 AM »
Lookup the following research papers online or contact one of the authors. Unfortunately, I can't share the first paper due to copyright restrictions by the journal publisher. You can find other papers online or just PM me for a copy.

PAPER #1

Peer to Peer Lending: The Relationship Between Language Features, Trustworthiness, and Persuasion Success
Laura Larrimore, Li Jiang, Jeff Larrimore, David Markowitz & Scott Gorski
Journal of Applied Communication Research Vol. 39, No. 1, February 2011, pp. 19-37
ISSN 0090-9882 (print)/ISSN 1479-5752 (online) # 2011 National Communication Association DOI: 10.1080/00909882.2010.536844

ABSTRACT
This study examined the relationship between language use and persuasion success in the Peer-to-Peer (P2P) lending environment where unaffiliated individuals borrow money directly from each other using a textual description to justify the loan. Over 200,000 loan requests were analyzed with Linguistic Inquiry and Word Count (LIWC) software. The use of extended narratives, concrete descriptions and quantitative words that are likely related to one’s financial situation had positive associations with funding success which was considered to be an indicator of trust. Humanizing personal details or justifications for one’s current financial situation were negatively associated with funding success. These results offer insights into how individuals can optimize their persuasiveness by monitoring their language use in online environments.

AUTHORS
Laura Larrimore is in the Department of Communications at Ithaca College. Li Jiang, David Markowitz, and Scott Gorski are in the Department of Communications at Cornell University. Jeff Larrimore is in the Department of Economics at Cornell University. Many thanks to Jeff Hancock and Amy Gonzales for their helpful comments and suggestions on earlier drafts of this paper. Correspondence to: Laura Larrimore, Ithaca College, Department of Communications, 311 Park Hall, Ithaca, NY 14850USA. E-mail: laura.larrimore@ gmail.com

PAPER #2

Is Silence Golden? – How Non-Verifiable Information Influences Funding Outcomes On Peer-to-Peer Lending Platforms
Fabio Caldieraro, Marcus Cunha Jr., Jeffrey D. Shulman, Jonathan Zhang

ABSTRACT
The advent of online social media has connected individuals to facilitate not only interpersonal interactions, but also business transactions. One of the rapidly growing areas that has sparked great interest for individual business opportunities is peer-to-peer lending where borrowers and lenders are individuals rather than larger organizations. Our study investigates how the provision of non-verifiable information by a potential borrower impacts the loan funding outcome. We test theories from psychology and economics with divergent predictions with respect to the effect of non-verifiable information on loan funding. Using secondary data from a peer-to-peer lending website, we find a significant non-monotonic relationship between borrower-provided, non-verifiable information and loan approval. This data pattern is consistent with the predictions of the counter-signaling theory from economics. More specifically, when borrowers withhold non-verifiable information, they are more likely to have their loan applications funded. Subsequently, we find loan performance also follows the predictions from counter-signaling theory. Thus, borrowers who withhold non-verifiable information exhibit a significantly lower likelihood of delinquency. We provide empirical evidence that counter- signaling is used as a mechanism to resolve information asymmetry, and provide guidance on what lenders and borrowers should focus on when making lending/borrowing decisions.

AUTHORS
All authors are in the Marketing Department at Michael G. Foster School of Business, University of Washington, Seattle, WA 98195-3200. Fabio Caldieraro can be reached at cfabio@uw.edu. Marcus Cunha can be reached at cunhamv@uw.edu. Jeffrey D. Shulman can be reached at jshulman@uw.edu. Jonathan Zhang can be reached at zaozao@uw.edu.

PAPER #3

Tell me a good story and I may lend you my money: The role of narratives in peer-to-peer lending decisions
Michal Herzenstein, Scott Sonenshein, Utpal M. Dholakia

ABSTRACT

This research examines the role of identity claims constructed in narratives by borrowers in influencing lender decision making regarding unsecured personal loans. Specifically, whether the number of identity claims and their content influence decisions of lenders and whether they predict longer-term performance of funded loans. Using data from the peer-to-peer lending website Prosper.com, the authors find that unverifiable information affects lending decisions above and beyond objective, verifiable information. Specifically, as the number of identity claims in narratives increases, so does loan funding but loan performance suffers, because these borrowers are less likely to pay back. In addition, identity content plays an important role. Identities about being trustworthy or successful are associated with increased loan funding but ironically they are less predictive of loan performance compared with other identities (moral and economic hardship). Thus, some identity claims are meant to mislead lenders while others are true representations of borrowers.

AUTHORS
Michal Herzenstein, Assistant professor of marketing, Lerner College of Business and Economics University of Delaware, Newark, DE 19716, Tel: (302) 831-1775, Email: michalh@udel.edu
Scott Sonenshein, Assistant professor of management Jones Graduate School of Business Rice University, 6100 Main Street, Houston, TX 77005 Tel: (713) 348-3182 Email: scotts@rice.edu
Utpal M. Dholakia, Professor of management, Jones Graduate School of Business Rice University, 6100 Main Street, Houston, TX 77005, Tel: (713) 348-5376, Email: dholakia@rice.edu


For me it wasn't about spelling, it was spotting and avoiding borrowers obviously didn't care a lick about how they presented themselves to the people who were loaning them thousands of dollars.  To me, that's a red flag. 

Based on the suggestion of one of of users, we tested a language analysis algorithm to establish an 'English correctness' score for each loan application. Oddly enough, such score was poorly but negatively corrected with returns. Said otherwise, people who 'didn't care a lick' seemed to be, on average, slightly better borrowers! Like you, I would have guessed the opposite.

That's very counter-intuitive. I can't really think of a good explanation, either.
« Last Edit: March 24, 2014, 03:52:13 AM by AnilG »
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Emmanuel

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Re: Can't ask questions?
« Reply #9 on: March 24, 2014, 11:11:19 AM »
as the number of identity claims in narratives increases, so does loan funding but loan performance suffers, because these borrowers are less likely to pay back.

So, a far-fetched explanation would be that dubious borrowers make extra efforts to inspire confidence, the same way scammers wear expensive suits.

Maybe a better analysis would be to match the narrative with the loan purpose and other data. For instance, if someone pretends to pay off credit card debt, you don't want 'pimp up my car' in the description! Oh well, let's stick to quantitative data for the moment being...