Using data from Lending Club and Prosper, the two largest peer-to-peer lenders in the U.S., we provide evidence of the winner's curse in the online personal lending market. Borrowers who were rejected by a competitor are twice as likely to default as borrowers who were not rejected, conditional...

Credit markets around the world are undergoing a deep transformation. Fintech and big tech firms are providing more lending to households and small businesses. A new database estimates that fintech credit flows reached USD 223 billion in 2019, while big tech credit reached USD 572 billion. What...

We study the impact of trust on the expansion of online lending in the U.S. over the 2008-2016 period. Using data from the largest platform, we demonstrate that a misconduct-driven decline of trust in traditional banking is associated with a statistically and economically significant increase in...