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Does team competition increase pro-social lending?: evidence from online microfinance

[working paper]

Chen, Roy; Chen, Yan; Liu, Yang; Mei, Qiaozhu

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Corporate Editor Wissenschaftszentrum Berlin für Sozialforschung gGmbH
Abstract We investigate the effects of team competition on pro-social lending activity on, the first microlending website to match lenders with entrepreneurs in developing countries. Using naturally occurring field data, we find that lenders who join teams contribute 1.2 more loans ($30-$42) per month than those who do not. To further explore factors that differentiate successful teams from dormant ones, we run a large-scale randomized field experiment (n = 22, 233) by posting forum messages. Compared to the control, we find that lenders make significantly more loans when exposed to a goal-setting and coordination message, whereas goal-setting alone significantly increases lending activities of previously inactive teams. Our findings suggest that goal-setting and coordination are effective mechanisms to increase pro-social behavior in teams. (author's abstract)
Keywords field research; identity; cultural identity; credit; microfinance; team; competition; altruistic behavior
Classification Economic Policy; Social Psychology
Document language English
Publication Year 2014
City Berlin
Page/Pages 45 p.
Series Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Markt und Entscheidung, Abteilung Verhalten auf Märkten, SP II 2014-209
Status Published Version; reviewed
Licence Deposit Licence - No Redistribution, No Modifications