Download This PaperUser Interface and First-hand Experience in Retail Investing
Kelley School of Business Research Paper No. 18-54
The Review of Financial Studies, 34 (2021): 4486–4523
53 Pages Posted: 20 Jun 2018 Last revised: 8 Aug 2022
Date Written: October 25, 2020
Abstract
Using data from a major online peer-to-peer lending platform, we document that, due to time pressure, investors appear to focus on interest rates and only partially account for credit ratings in their decisions. The effect is stronger for mobile-based investors than for PC-based ones. Our evidence suggests that this variation is caused by the difference in information content on the interfaces rather than differences in the devices’ physical attributes per se. Investors improve their decisions by slowing down and paying more attention to credit ratings after experiencing a loan default firsthand, but not after observing others experiencing defaults.
Keywords: Rule of thumb, fast thinking, mobile investing, salience, first-hand experience, P2P
JEL Classification: G12
Suggested Citation: Suggested Citation
Jun Yang
Indiana University - Kelley School of Business - Department of Finance ( email )
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