How does P2P Online Lending Individual’s Default Behavior Influence on Observer’s Default Intention?

Abstract

The existing literature shows that individuals’ default behavior of Peer to Peer (P2P in abbreviation) online lending has a great influence on observers’ default intention. However, how is the observer’s default intention influenced by the P2P online lending defaulter? What variables mediate or moderate the relationship between the individual’s default behavior and the observer’s default intention? These important questions remain to be resolved. This paper aims to address these unresolved questions. Through making carefully designed two experiments, our research results show that: the individual’s default behavior can rise the observer’s default intention due to current imperfect Chinese P2P Online Lending punishment regulations; the observer’s moral disengagement level and pragmatic self-activation level are the two mediating variables whereas the intimacy level between the defaulter and the observer is the variable moderating the relationship between the individual’s default behavior and the observer’s default intention. Intimacy level can also moderate the relationship between the individual’s default behavior and the two mentioned mediator variables. The paper also provides some related management suggestion about P2P online lending.