Learning by Doing in Crowdlending Auctions

Carole Gresse and Hugo Marin
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Carole Gresse: DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique
Hugo Marin: DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

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Abstract: We construct a novel taxonomy of bidding strategies in crowdlending Dutch auctions by mapping the auction process into six areas, each area representing a specific winning bidding strategy. Those strategies are associated with five types of investors: non-strategic, irrational, informed, strategic followers, and snipers, the last three types being considered as sophisticated. Applying this classification to peer-to-business crowdlending data, we find that retail investors mostly use sophisticated strategies, and that their bidding behavior changes as they gain experience in auctions. More specifically, the more they win in auctions, the more likely they are to adopt rewarding sophisticated bidding strategies.

Keywords: bidding strategies; crowdlending; learning effects (search for similar items in EconPapers)
Date: 2024-06
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Published in 17th BFWG Annual International Conference (Behavioural Finance Working Group ), Jun 2024, Londres, United Kingdom

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04659990

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