Extending recent work on market mechanisms in new fintech offerings, we explore the implications of a key mechanism in online crowdfunding – the use of a provision point. Under a provision point mechanism (otherwise known as all-or-nothing or fixed fundraising scheme), the fundraiser,...

This paper investigates how friendship relationships act as pipes, prisms, and herding signals in a large online Peer-to-Peer (P2P) lending site. By analyzing decisions of lenders, we find that friends of the borrower, especially close offline friends, act as financial “pipes” by lending...