Abstract
This paper presents novel empirical evidence on the effects of time pressure on individual behavior by using the data in the peer-to-peer (P2P) lending market, renrendai.com in China. We show that after controlling the risk factors, individual investors tend to make bad decisions by choosing lower payoff loan listings within a shorter time under higher time pressure. Besides, under higher time pressure, the investors tend to ask less for risk compensation. We also show that when faced with the same nominal interest rate, investors prefer higher risk that implied by other information under higher time pressure, and as the time pressure goes high, theses behavior biases also increase.
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