A Coordination Game Model of Charitable Giving and Seed Money Effect

Hatsumi, Kentaro

doi:10.1111/jpet.12025

Cited by 1 publication

(1 citation statement)

References 28 publications

(67 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Roberts [22] similarly models the impact on charitable contributions of government funding aimed at the poor (see also [28]). Other examples of analytical models of giving includes Hatsumi [11] who models the impact of giving when seed money is provided as start-up capital. In this paper, we apply similar concepts to the potential identification bias benefit that can occur in P2P social lending networks.…”

Section: P2p Social Lendingmentioning

confidence: 99%

A model of peer-to-peer (P2P) social lending in the presence of identification bias

Riggins

Weber

2011

Proceedings of the 13th International Conference on Electronic Commerce

View full text Add to dashboard Cite

The Internet has created new opportunities for peer-to-peer (P2P) social lending platforms to emerge which have the potential to transform the way microfinance institutions (MFIs) raise and allocate funds used for poverty reduction. Depending upon where decision making rights are allocated, there is the potential for identification bias whereby lenders may be motivated to give to specific projects with which they have a personal interest or affinity without regard to whether or not it represents a particularly sound financial investment. In this paper, we present an analytical model where an individual lender can use a P2P social lending network to provide funds to entrepreneurs seeking funding in developing nations. We show that in the presence of identification bias, the P2P social lending network can be used to increase overall contributions for poverty reduction despite the fact that such a network may result in inefficient allocation of funds. Even so, in the presence of strong identification bias this inefficient mechanism can result in improved poverty reduction through the provisioning of financial services in the microfinance industry.

show abstract

Section: P2p Social Lendingmentioning

confidence: 99%