Does Membership in a Nominal Online Group Affect Long-Term Customer Behaviors? Results from a Naturalistic Field Experiment on Kiva.org

42 Pages Posted: 27 Jan 2015 Last revised: 28 Apr 2020

See all articles by Siddharth S. Singh

Siddharth S. Singh

Rice University - Jones Graduate School of Management

Utpal M. Dholakia

Rice University - Jesse H. Jones Graduate School of Business

Sharad Borle

Rice University

Date Written: June 13, 2015

Abstract

In this exploratory investigation, we examine changes associated with joining a nominal online group on longer-term behavior of lenders on the leading peer-to-peer microcredit site Kiva.org. Using a random sample of 5,000 Kiva lenders and exploiting a naturalistic field experimental manipulation (the introduction of the “lending teams” feature on Kiva), we analyzed the relationship of group membership with lending behaviors over a two year period. Our results reveal that lending team membership is positively associated with both the number of loans granted and the amount of money loaned whereas non-membership is associated with drop-offs in both behavioral measures. These results suggest that providing customers with the opportunity to join nominal online groups based on their existing affiliations (such as their alma mater, favorite sports team, nationality, etc.) may offer marketers with a relatively inexpensive, low-maintenance, and effective method of strengthening relationships with customers.

Keywords: Online community, financial decision making, minimal groups, microfinance, lending decisions, MCMC, Hierarchical Bayes

Suggested Citation

Singh, Siddharth S. and Dholakia, Utpal M. and Borle, Sharad, Does Membership in a Nominal Online Group Affect Long-Term Customer Behaviors? Results from a Naturalistic Field Experiment on Kiva.org (June 13, 2015). Indian School of Business, Available at SSRN: https://ssrn.com/abstract=2555787 or http://dx.doi.org/10.2139/ssrn.2555787

Siddharth S. Singh

Rice University - Jones Graduate School of Management ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States

Utpal M. Dholakia (Contact Author)

Rice University - Jesse H. Jones Graduate School of Business ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States

Sharad Borle

Rice University ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States

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