P2P Market Research Articles

The role of P2P platforms in enhancing financial inclusion in the United States: An analysis of peer‐to‐peer lending across the rural–urban divide

AbstractIn this paper, we examine the role of peer‐to‐peer (P2P) platforms in enhancing financial inclusion from the borrowers’ point of view across the rural–urban dimension. We show that when number of bank branches decrease in a rural community, the P2P loan requests increase if there is at least one bank branch in the community allowing people to participate in the P2P market. We also find that the number of P2P loan requests from urban areas is higher when such areas have fewer pawnshops per capita. Our results suggest that P2P enhances financial inclusion of those lacking traditional institutions in rural communities and offers an alternative to those with fewer fringe banks in urban communities.

Seasonality in the peer-to-peer market for tourist accommodation: the case of Majorca

PurposeThe purpose of this paper is to verify the hypothesis that seasonality in the peer-to-peer (p2p) market for tourist accommodation is smaller than the existing in conventional markets, taking the case of the island of Majorca as a reference. This paper will also determine the role of professional hosts in the management of prices and in the marketing of accommodation according to seasonal demand variations.Design/methodology/approachFrom the information obtained through web scrapings of Airbnb listings and from data provided by official statistics, comparable indicators of seasonality are developed. Likewise, econometric estimates are provided to detect differences regarding the determination of accommodation prices between professional and nonprofessional hosts.FindingsThe p2p market is less subject to seasonality than the conventional one. In the particular case of Palma de Majorca, fluctuations in accommodation demand are even smaller than in the rest of the island's municipalities. Professional hosts apply marketing techniques related to price and product promotion and are sensitive to demand variations altering prices and responding to the economic stimuli in this way. At an academic level, these findings suggest, on the one hand, the relevance of considering the heterogeneity of the touristic market when constructing theoretical models. And, on the other hand, basic economic principles should be applied to explain agent behavior in the p2p market.Research limitations/implicationsThis work does not use a direct demand measurement. Instead, it approximates demand through the reviews left by guests in p2p markets. At least in the case of the island of Majorca, the touristic demand represents a reduced percentage of touristic demand in total.Practical implicationsSo far, both public and private strategies to combat seasonality have focused on increasing occupancy in conventional accommodation. Still, the fact that hotel demand and private accommodation demand are different has relevant implications for price management, touristic products, supply planning and the implementation of marketing campaigns. Also, advertising could be aimed at alleviating the undesirable effects of seasonality.Social implicationsThe evidence presented helps the design of public policy strategies aimed at mitigating the problem of seasonality in touristic demand to accommodate it to social preferences in each area.Originality/valueThis is the first piece of research, as far as we are aware of, that addresses the phenomenon of demand seasonality in the p2p market for tourist accommodation. In addition, a comparison is made with the seasonal patterns that characterize the conventional hotel market. New ideas are provided for the design of a comprehensive touristic policy in which both markets are considered.

Electrical-distance driven peer-to-peer energy trading in a low-voltage network

Given the increasing penetration of distributed energy resources (DER) in low-voltage networks, peer-to-peer (P2P) energy trading has been proposed to facilitate DER integration into power systems. In this paper, we investigate P2P energy trading driven by the electrical distance between agents in a low-voltage network. Our market design considers the role of a distributed system operator (DSO) who determines the shortest path between agents, encoded in preference lists. The DSO submits the preference lists to the agents but does not intervene in the P2P matching process. Specifically, we propose two decentralised P2P market mechanisms that are induced by the relations in the preference lists. First, we introduce a stable-matching (SM) algorithm for matching agents and guaranteeing that no agents want to mutually deviate from the matching. Second, a mechanism based on a continuous double auction (CDA) is adopted for continually matching peers. The proposed mechanisms are tested on a UK low-voltage network. Simulation results show that the outcome of the proposed SM mechanism faces a trade-off between the stability of the matching and market efficiency, whereas the proposed CDA-based mechanism deviates from the stable outcome but can still capture the high market efficiency of the CDA. We show that a P2P market driven by electrical distance leads to reduced losses and line congestion in both mechanisms.

Dreaming like a market: The hidden script of financial inclusion in China's P2P lending platforms

In the past ten years, Chinese people of different social strata have swarmed into the peer‐to‐peer (P2P) lending industry as lenders and borrowers. Meanwhile, stories have circulated across the media about desperate investors who lost their life savings on these lending platforms, many of which turned out to be Ponzi schemes. Based on fifteen months of fieldwork, this article presents a failed yet influential social experiment of digital finance in the world's largest developing economy. This article examines the morality of the P2P market by observing how the aspirational public script of financial inclusion is maintained and experienced through a hidden technological script that alienates the notion of “peer.” This article argues that the morality of the market is not only about “seeing” and judging from a distance but also about “feeling” and managing the moral boundaries and intersubjective distances between actors. These altered distances restructure interpersonal responsibilities and sustain the dreams and imagination that shape financial subjects on an unconscious level. The article expands the concept of market relationality beyond direct interactions between actors and uncovers the inherent tensions within the dream of financial inclusion. It examines the fantasy of beneficial technology in shaping market morality and the unintended consequences it produces.

The Role of P2P Platforms in Enhancing Financial Inclusion in US – An Analysis of Peer-to-Peer Lending Across the Rural-Urban Divide

In this paper, we examine the role of P2P platforms in enhancing financial inclusion from the borrowers’ point of view across the rural-urban dimension. We show that when number of bank branches decrease in a rural community, the P2P loan requests increase if there is at least one bank branch in the community allowing people to participate in the P2P market. We also find that the number of P2P loan requests from urban areas are higher when such areas have fewer pawnshops per capita. Our results suggest that P2P enhances financial inclusion of those lacking traditional institutions in rural communities and offers an alternative to those with fewer fringe banks in urban communities.

A novel decentralized platform for peer-to-peer energy trading market with blockchain technology

Peer-to-Peer (P2P) energy trading, which allows energy consumers/producers to directly trade with each other, is one of the new paradigms driven by the decarbonization, decentralization, and digitalization of the energy supply chain. Additionally, the rise of blockchain technology suggests unprecedented socio-economic benefits for energy systems, especially when coupled with P2P energy trading. Despite such future prospects in energy systems, three key challenges might hinder the full integration of P2P energy trading and blockchain. First, it is quite complicated to design a decentralized P2P market that keeps a fair balance between economic efficiency and information privacy. Secondly, with the proliferation of storage devices, new P2P market designs are needed to account for their inter-temporal dependencies. Thirdly, a practical implementation of blockchain technology for P2P trading is required, which can facilitate efficient trading in a secured and fraud-resilient way, while eliminating any intermediaries’ costs. In this paper, we develop a new decentralized P2P energy trading platform to address all the aforementioned challenges. Our platform consists of two key layers: market and blockchain. The market layer features a parallel and short-term pool-structured auction and is cleared using a novel decentralized Ant-Colony Optimization method. This market arrangement guarantees a near-optimally efficient market solution, preserves players’ privacy, and allows inter-temporal market products trading. The blockchain layer offers a high level of automation, security, and fast real-time settlements through smart contract implementation. Finally, using real-world data, we simulate the functionality of the platform regarding energy trading, market clearing, smart contract operations, and blockchain-based settlements.

Influence of nonspecific factors on the interest rate of online peer-to-peer microloans in China

This work explores the influence of nonspecific factors, including internal parameters such as term, volume, and participants, and external ones such as risk-free interest rates, private lending interest rates, and online attention, on the average interest rate of peer-to-peer (P2P) microloans in China. Empirical findings reveal that with a positive coefficient, the private lending interest rate is the most significant influencing factor. China's P2P market was changed on June 15, 2018; the effect of the private lending interest rate turned insignificant, and the negative coefficient of the loan term, short-term risk-free interest rate, and online attention became positive.

Static Game Models and Applications Based on Market Supervision and Compliance Management of P2P Platform

This article focuses on the two-party static game between market supervisory organization and peer-to-peer (P2P) lending platform. Considering 4 game modes with both “strong supervision” and “weak supervision” of market supervisory organization and “compliance management” and “noncompliance management” of P2P lending platform, the paper establishes a static game model between P2P lending platform and market supervisory organization and solves the market equilibrium solutions. Based on income, cost, disguised cost, and fine of P2P lending platform and income, cost, and reward of market supervisory organization, it discusses conditional strategies that P2P lending platform selects “compliance management” or “noncompliance management” and that market supervisory organization selects “strong supervision” or “weak supervision,” respectively. Furthermore, the relevant influencing factors are analyzed which come from 18 P2P lending platforms in Guangdong Province of China, and the conclusions were in good agreement with the actual market. The research has scientific guiding significance.

An Optimal Peer-to-Peer Market Considering Modulating Heat Pumps and Photovoltaic Systems under the German Levy Regime

The European Commission calls for more small-scale renewable energy producers to actively participate in the energy value chain. In this study, we model an illustrative peer-to-peer (P2P) market with tariffs based on the reservation prices of market participants under the German levy regime. The study is conducted by modeling representative residential buildings with home energy management systems, modulating heat pumps, and photovoltaics, in combination with electrical and thermal storage systems. The resulting mixed-integer linear program is solved over the course of a year, using a rolling horizon approach with a time resolution of one hour. By analyzing the cost- and discomfort-minimizing behavior of the market participants, we evaluate the current levy regime and propose two additional designs. We find that in the current case, a P2P market is not economically viable. Based on feed-in tariffs (FiT) and levies no agreeable market price can be found. With no FiT or reduced levies, all participants benefit from the P2P market. The market split—where each household sources their energy from—is altered only little by the specific details of the market design when staying in the agreeable price range. As prosumagers do not consume on the P2P market, they benefit only marginally from the reduced levies—consumers are most affected. Adjusting the regime could be a measure to rebalance the distribution of renewable energy benefits towards consumers in order to foster social cohesion. Our input data and the model written in the Julia JuMP programming language are available in an open-source format.

Chance-Constrained Peer-to-Peer Joint Energy and Reserve Market Considering Renewable Generation Uncertainty

Due to the fast development of distributed energy resources and demand-side response management, agents in electricity markets are becoming more proactive, which boosts the development of peer-to-peer (P2P) market mechanisms. However, to our knowledge, none of the existing works considers clearing both energy and reserve via a P2P market mechanism in order to compensate for the uncertainty originating from renewable generation and allocate the reserve cost induced by uncertainty fairly. In this article, a novel P2P joint energy and reserve market is proposed, where each agent can negotiate with neighboring agents to determine the quantities and prices of traded energy and reserve. We model the renewable generation uncertainty by versatile distribution and determine the required reserve based on a chance-constrained optimization approach. Then, a fully decentralized P2P market based on consensus alternating direction method of multipliers (ADMM) theory is proposed. In addition, to further lower the social cost, we exploit the correlation and complementarity among uncertainties and design a renewable community-based market, where all renewable agents share uncertainty information to community manager for calculating total required reserve. Finally, simulation results show the convergence performance, fairness and scalability of our market mechanism.

Optimal Solution Analysis and Decentralized Mechanisms for Peer-to-Peer Energy Markets

This paper studies the optimal clearing problem for prosumers in peer-to-peer (P2P) energy markets. It is proved that if no trade weights are enforced and the communication structure between successfully traded peers is connected, then the optimal clearing price and total traded powers in P2P market are the same with that in the pool-based market. However, if such communication structure is unconnected, then the P2P market is clustered into smaller P2P markets. If the trade weights are imposed, then the derived P2P market solutions can be significantly changed. Next, a novel decentralized optimization approach is proposed to derive a trading mechanism for P2P markets, based on the alternating direction method of multipliers (ADMM) which naturally fits into the bidirectional trading in P2P energy systems and converges reasonably fast. Analytical formulas of variable updates reveal insightful relations for each pair of prosumers on their individually traded prices and powers with their total traded powers. Further, based on those formulas, decentralized learning schemes for tuning parameters of prosumers cost functions are proposed to attain successful trading with total traded power amount as desired. Case studies on a synthetic system and the IEEE European Low Voltage Test Feeder are then carried out to verify the proposed approaches.

A dynamic decision support system for evaluating peer-to-peer rental accommodations in the sharing economy

Abstract Accommodation accounts for one of the biggest expenses while traveling, and deciding where to stay is often confusing and time-consuming. Fortunately, travelers have more options than ever before because of the substantial growth of the peer-to-peer (P2P) short-term rentals in the sharing economy. Designing a user-friendly system that considers travelers’ preferences in choosing the right accommodation can enhance customer satisfaction and increase profitability. We propose a dynamic decision support system based on the theory of multi-criteria decision making to assist travelers in personalizing their preferences and finding quality accommodations in the dominant P2P market that aligns with those preferences. We use the fuzzy best-worst method to measure the intensity of the user’s preferences and the fuzzy technique for order of preference by similarity to the ideal solution (TOPSIS) to score and evaluate alternative P2P rental properties. We present a case study in the P2P rental accommodations industry to demonstrate the applicability of the method proposed in this study.

Peer-to-peer electricity trading in grid-connected residential communities with household distributed photovoltaic

With the rapid development of distributed electricity generation technologies such as solar photovoltaics, peer-to-peer (P2P) electricity trading is attracting incremental attention due to the pursuit of decentralized energy autonomy and further economic benefits. The study presented in this paper aims to gain a better understanding of the community P2P electricity trading, including influence of trading strategies, determinants of trading quantity and price, and further factors affecting improvement in community energy welfare. The market mechanism is determined based on the discriminatory continuous double auction, followed by simulations of the trading process in well-designed cases. Results show that P2P trading price and quantity depend on variation of the supply–demand ratio during each trading period, by which in the absence of complex trading strategies and learning abilities, profits are able to be effectively and fairly allocated among participants. For a given community, the total profits that could be obtained from P2P electricity trading are influenced by many factors, and the key is to make those “ineffective supply” available in the P2P market again, through active energy management solutions on all residents rather than focusing only on prosumers’ self-consumption in the past. The ensuing results make significant sense as regards better understanding both the benefits and limitations of P2P electricity trading in residential communities or other similar scenes, thus helping for guiding practical implementation.

Realistic energy commitments in peer-to-peer transactive market with risk adjusted prosumer welfare maximization

As the local energy sources are mostly uncertain and fluctuating in nature, the ‘energy risk’ due to discrepancies between committed energy transactions and metered measurements is prominent in peer to peer (P2P) markets. We propose a P2P market settlement mechanism which lowers this risk and maximizes the welfare of buyers and sellers. The risk in energy production is modelled using Markowitz portfolio theory and the best point where energy return per unit risk is maximum is obtained from the efficient frontier by using the modified Sharpe ratio. The energy portfolio thus obtained is used as a constraint while optimizing the conflicting prosumer benefits using multi-objective stochastic weight trade-off chaotic non-dominated sorting particle swarm optimization (SWTC-NSPSO). In effect, only a reliable proportion of total energy demand submitted in the bid is cleared in the market, foreseeing the real-time fluctuations. The proposed market settlement mechanism also gives room to the existing distribution system operators by assigning them the duty of 1) optimally allocating energy among buyers and sellers in accordance with their competitive bids 2) providing the infrastructure, managing the market and charging for the service and 3) checking the technical feasibility by performing load flow and monitoring power transfer sensitivities to encourage short distance transactions. The energy allocation is done in CIGRE LV benchmark microgrid with ten peers having solar and wind generation. The allocated energy is found to be closer to the metered measurements and hence the reserve cost is observed to be less.

A motivational game-theoretic approach for peer-to-peer energy trading in islanded and grid-connected microgrid

Global warming has made the transition to zero-carbon emissions generation a necessity for a healthy and green society. This requires that the dependability on the main grid, which is mostly driven by fossil fuel, natural gas, and coal, be reduced. Peer-to-peer (P2P) energy trading has been proposed to achieve this objective. However, the success of such trading depends on the fulfillment of energy-related objectives of participants. The identification of energy-related objectives of participants and their fulfillment is a challenging task. For this purpose, this paper proposes a game-theoretic approach to motivate prosumers for P2P energy trading in both the islanded and grid-connected modes. First, a model that addresses the basic energy-related objectives of both producers and consumers is proposed along with the layered architecture of P2P market to identify and categorize the existing technologies. Then, an extensive form game based on non-cooperative game theory is described and the existence of its strict Nash equilibrium is evaluated. An energy allocation policy has also been devised that motivates prosumers by ensuring that none of them exits the market without trading irrespective of the balance between supply and demand. The proposed energy trading scheme is evaluated on the IEEE-14 bus system with 8 producers and 11 consumers as market participants. We performed comprehensive experiments and the results of these experiments are compared with the previous studies and found that 33% to 7% reduction in energy bills of the consumers is achieved from the proposed scheme which boldly shows the effectiveness of the proposed scheme.

Compensation for Power Loss by a Proof-of-Stake Consortium Blockchain Microgrid

Distributed generation in the microgrid becomes increasingly significant, as it eliminates the power losses from long-distance electricity transmission lines. Distributed energy resources owners who can both produce and consume energy are defined as prosumers. To encourage the peer-to-peer (P2P) energy trading between prosumers, blockchain as a thriving technology is utilized in the P2P network due to its transparency, security, and rapidity in executing transactions. Due to its decentralized quality, any intermediaries are eliminated so that transactions happen directly among traders. This article introduces a consortium blockchain trading model to support P2P energy trading, using a proof-of-stake protocol. The pre-selected miners are responsible for compensating the power losses in distribution lines by energy transactions. The specific process of the blockchain establishment, as well as the smart contract creation, are demonstrated. In addition, a type of crypto-currency named “elecoin” is created in the P2P market, which is published by the mining mechanism of the blockchain. Finally, a case study is introduced to realise the functions of the proposed blockchain model. Simulation results show the feasibility and effectiveness of the proposed approach.

How do lenders evaluate borrowers in peer-to-peer lending in China?

We examine how lenders incorporate borrowers’ demographic characteristics and behaviors into their decisions in peer-to-peer (P2P) lending in China. Using the Renrendai online platform from 2013 to 2015, we find that the P2P market correctly uses the education level of borrowers (but not age, gender, and marital status) to evaluate their creditworthiness and anticipated loan performance. Borrowers with higher education levels have greater success in attracting funding and a lower probability of default, and those who extend funding to them can expect to receive higher returns. Younger female borrowers are less likely to be funded, even though they have a lower probability of default. Some borrowers may use more positive emotional appeals to persuade lenders to extend funding; however, lenders respond adversely to such appeals.

Development of a smart electricity meter for households based on existing infrastructure.

Following the universal introduction of information technologies in the electric power industry, it became necessary to create a more perfect measuring infrastructure that would reduce theft of electricity and implement new concepts such as demand response and the P2P market. Existing meters are able to solve the problem of reducing theft, but they do not yet support the functions of P2P trading. This article proposes the development of a smart metering device based on ESP 8266 controller for detection and control of electrical energy and remote turning off or turning on the consumer supply. The meter will be able to exchange information with the cloud platform in real time and provide information about the decline in the quality of electrical energy. It is proposed to use Wi-Fi (main) and GSM (reserve) communication channels.

Is peer-to-peer electricity trading empowering users? Evidence on motivations and roles in a prosumer business model trial in Australia

Peer-to-peer (P2P) electricity markets have attracted significant attention as a promising model enabling the integration of distributed energy sources by creating consumer-based electricity markets. Despite the significance of users in this model, knowledge is still lacking as to who the users interested in P2P electricity markets are and what role they can play in building them. We aim to fill this knowledge gap by providing evidence from the first real-world trial of a P2P electricity market facilitated by blockchain technology across a regulated electricity network. We apply sustainability transition and innovation thinking to analyse the trial participants as users shaping the P2P-related innovation process. Supported by our empirical results, we found that users joined the P2P market trial to learn and co-create the future of prosumer-centred electricity markets. We also found that if P2P is to enter the mainstream market, the assistance of other actors (e.g., intermediaries and activists) is important in order to cross the chasm to reach the majority of users and move from a learning and probing phase to breakthrough and wide diffusion.

Coordinating energy management for multiple energy hubs: From a transaction perspective

The coupled multiple energy carriers integrated with distributed energy units, e.g., energy converters, renewable energy, and storages have offered energy hubs high flexibility and independent controllability. In this paper, a decentralized transactive based energy management framework enabling coordination among multiple energy hubs (MEHs) is developed. Aiming to improve the economic performance of the interconnected energy hub system, a peer to peer (P2P) transaction platform is established for the self-organized trading of MEH. Particularly, a generic scheme for the generation of transaction prices is specified for the energy hub, which is firstly integrated into a modified alternating direction method of multipliers (ADMM) method for the realization of achieving P2P transaction consensus amongst MEHs. Furthermore, this price scheme offers high traceability of energy-price flows inner EHs operation process and external energy transaction activities, providing transparent price signals in the local P2P market. A three-energy hub system is simulated, and numerical case studies have demonstrated the proposed coordination scheme actively encourages individual EH to enroll in the P2P transaction scheme, offering all EHs a win-win transaction framework and improving the global economic efficiency of the networked system.