Examining failure learning in online lending: Complete failure vs. incomplete failure.

We examine the learning effects of borrowers' failures in online lending. Based on funding ratios of borrowers' loan listings in online lending, we first explore the role of failure degree in borrowers' future funding performance. Further, we disaggregate borrowers' funding failu...

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Autores principales:	Ji-Wen Li, Qinghui Cui, Jia-Jia Zhang
Formato:	article
Lenguaje:	EN
Publicado:	Public Library of Science (PLoS) 2021
Materias:	Medicine R Science Q
Acceso en línea:	https://doaj.org/article/8fc56bf0e6db4b22894d0b93274b90b1
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id	oai:doaj.org-article:8fc56bf0e6db4b22894d0b93274b90b1
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spelling	oai:doaj.org-article:8fc56bf0e6db4b22894d0b93274b90b12021-12-02T20:07:43ZExamining failure learning in online lending: Complete failure vs. incomplete failure.1932-620310.1371/journal.pone.0255666https://doaj.org/article/8fc56bf0e6db4b22894d0b93274b90b12021-01-01T00:00:00Zhttps://doi.org/10.1371/journal.pone.0255666https://doaj.org/toc/1932-6203We examine the learning effects of borrowers' failures in online lending. Based on funding ratios of borrowers' loan listings in online lending, we first explore the role of failure degree in borrowers' future funding performance. Further, we disaggregate borrowers' funding failure into complete failure and incomplete failure, and compare theirs learning effects. Using a large sample of 610,000 online loan applications over six years from a Chinese leading online lending platform Renrendai, we use funding ratio to quantifiably measure each loan listing's failure degree and conduct a series of tests. The results show that: (1) Borrowers' failure degree of prior loan applications is negatively associated with one's subsequent funding performance. (2) Borrowers' complete failure cannot promote learning, while incomplete failure is good for future performance. (3) Both incomplete failure and complete failure interacted to influence the value of each type of experience and generate improved learning. Our results are robust across a variety of settings. The study sheds light for deeply understanding of failure learning phenomenon, and can also provide important implications for online lending managers to support successful financial transactions.Ji-Wen LiQinghui CuiJia-Jia ZhangPublic Library of Science (PLoS)articleMedicineRScienceQENPLoS ONE, Vol 16, Iss 11, p e0255666 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Medicine R Science Q
spellingShingle	Medicine R Science Q Ji-Wen Li Qinghui Cui Jia-Jia Zhang Examining failure learning in online lending: Complete failure vs. incomplete failure.
description	We examine the learning effects of borrowers' failures in online lending. Based on funding ratios of borrowers' loan listings in online lending, we first explore the role of failure degree in borrowers' future funding performance. Further, we disaggregate borrowers' funding failure into complete failure and incomplete failure, and compare theirs learning effects. Using a large sample of 610,000 online loan applications over six years from a Chinese leading online lending platform Renrendai, we use funding ratio to quantifiably measure each loan listing's failure degree and conduct a series of tests. The results show that: (1) Borrowers' failure degree of prior loan applications is negatively associated with one's subsequent funding performance. (2) Borrowers' complete failure cannot promote learning, while incomplete failure is good for future performance. (3) Both incomplete failure and complete failure interacted to influence the value of each type of experience and generate improved learning. Our results are robust across a variety of settings. The study sheds light for deeply understanding of failure learning phenomenon, and can also provide important implications for online lending managers to support successful financial transactions.
format	article
author	Ji-Wen Li Qinghui Cui Jia-Jia Zhang
author_facet	Ji-Wen Li Qinghui Cui Jia-Jia Zhang
author_sort	Ji-Wen Li
title	Examining failure learning in online lending: Complete failure vs. incomplete failure.
title_short	Examining failure learning in online lending: Complete failure vs. incomplete failure.
title_full	Examining failure learning in online lending: Complete failure vs. incomplete failure.
title_fullStr	Examining failure learning in online lending: Complete failure vs. incomplete failure.
title_full_unstemmed	Examining failure learning in online lending: Complete failure vs. incomplete failure.
title_sort	examining failure learning in online lending: complete failure vs. incomplete failure.
publisher	Public Library of Science (PLoS)
publishDate	2021
url	https://doaj.org/article/8fc56bf0e6db4b22894d0b93274b90b1
work_keys_str_mv	AT jiwenli examiningfailurelearninginonlinelendingcompletefailurevsincompletefailure AT qinghuicui examiningfailurelearninginonlinelendingcompletefailurevsincompletefailure AT jiajiazhang examiningfailurelearninginonlinelendingcompletefailurevsincompletefailure
_version_	1718375254945955840

Examining failure learning in online lending: Complete failure vs. incomplete failure.

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