Trading agent kills market information: Evidence from online social lending

Rainer Böhme, Jens Grossklags

Research output: Chapter in Book/Report/Conference proceedingConference contribution

3 Scopus citations

Abstract

The proliferation of Internet technology has created numerous new markets as social coordination mechanisms, including those where human decision makers and computer algorithms interact. Because humans and computers differ in their capabilities to emit and process complex market signals, there is a need to understand the determinants of the provision of market information. We tackle the general research question from the perspective of new electronic credit markets. On online social lending platforms, loan applications typically contain detailed personal information of prospective borrowers next to hard facts, such as credit scores. We investigate whether a change of the market mechanism in the form of the introduction of an automated trading agent shifts the dynamics of information revelation from a high-effort norm to a low-effort information equilibrium. We test our hypothesis with a natural experiment on Smava.de and find strong support for our proposition.

Original languageEnglish (US)
Title of host publicationWeb and Internet Economics - 9th International Conference, WINE 2013, Proceedings
Pages68-81
Number of pages14
DOIs
StatePublished - Dec 1 2013
Event9th International Conference on Web and Internet Economics, WINE 2013 - Cambridge, MA, United States
Duration: Dec 11 2013Dec 14 2013

Publication series

NameLecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume8289 LNCS
ISSN (Print)0302-9743
ISSN (Electronic)1611-3349

Other

Other9th International Conference on Web and Internet Economics, WINE 2013
CountryUnited States
CityCambridge, MA
Period12/11/1312/14/13

All Science Journal Classification (ASJC) codes

  • Theoretical Computer Science
  • Computer Science(all)

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