Journal
INTERNATIONAL JOURNAL OF ELECTRONIC COMMERCE
Volume 15, Issue 2, Pages 105-136Publisher
ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
DOI: 10.2753/JEC1086-4415150204
Keywords
E-finance; elaboration likelihood model; on-line communities; P2P marketplace; trust; trust-building mechanisms
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People-to-people (P2P) lending, a specialized consumer-to-consumer e-commerce model, facilitates borrowing and lending between individuals in on-line marketplaces. On-line market exchanges are usually characterized by uncertainty and risk. Since trust-building mechanisms and establishing trust can reduce the uncertainty arising from information asymmetries in exchange transactions, trust-building mechanisms are crucial to the prosperity of on-line marketplaces. Based on the elaboration likelihood model (ELM), which explains attitudinal change, trust-building mechanisms for P2P lending marketplaces are investigated empirically and tested. The study uses data collected from Prosper, the largest U.S. P2P lending marketplace. The results support the importance of the central route (economic status) as the major driver for bidding behavior and of peripheral cues (social capital and listing quality) as trust-building mechanisms that influence trust behavior. These findings will help on-line marketplace providers to build successful P2P lending marketplaces.
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