Social credit: a comprehensive literature review

Lean Yu,Ling Tang,Xinxie Li,Gang Kou,Zongyi Zhang

doi:10.1186/s40854-015-0005-6

Abstract

To avoid credit fraud, social credit within an economic system has become an increasingly important criterion for the evaluation of economic agent activity and guaranteeing the development of a market economy with minimal supervision costs. This paper provides a comprehensive review of the social credit literature from the perspectives of theoretical foundation, scoring methods, and regulatory mechanisms. The study considers the credit of various economic agents within the social credit system such as countries (or governments), corporations, and individuals and their credit variations in online markets (i.e., network credit). A historical review of the theoretical (or model) development of economic agents is presented together with significant works and future research directions. Some interesting conclusions are summarized from the literature review. (1) Credit theory studies can be categorized into traditional and emerging schools both focusing on the economic explanation of social credit in conjunction with creation and evolution mechanisms. (2) The most popular credit scoring methods include expert systems, econometric models, artificial intelligence (AI) techniques, and their hybrid forms. Evaluation indexes should vary across different target agents. (3) The most pressing task for regulatory mechanisms that supervise social credit to avoid credit fraud is the establishment of shared credit databases with consistent data standards.

Highlights

Increasing credit fraud has become the predominant problem disturbing normal economic market activities (Longstaff et al 2005; Prati et al 2012)
Credit fraud problems stem from information asymmetries among economic agents (Petersen and Rajan 2002); social credit evaluates the economic activities of various economic agents such as countries, corporations, and individuals and their credit variations in online markets
This paper provides a comprehensive review of the social credit literature

Summary

Introduction

Increasing credit fraud has become the predominant problem disturbing normal economic market activities (Longstaff et al 2005; Prati et al 2012). The related studies have focused mainly on the credit risk of one specific economic agent such as country credit (Doumpos et al 2001; Fioramanti 2006; Alp et al 2011), corporate credit (Blanco et al 2013; Zhou et al 2005; Tang and Chi 2005) or individual credit (Baesens et al 2003a; Desai et al 1996; West 2000) while neglecting other agents In this context, this study fills this literature gap by providing a comprehensive review of literature on social credit from the perspectives of theoretical foundation, scoring methods, and regulatory mechanisms, in which various economic agents in the social credit system (i.e., countries (or governments), companies, individuals, and netizens) are considered. Theoretical foundation Social theory investigates the economic explanations, creation mechanisms, and evolution mechanisms for social credit encompassing country, corporate, and individual credit for different target agents.

Technique DA

Technique Neural networks Neural networks

Findings

Model based on SVM and three strategies