Micro-Financing Decisions

Jeff Galak, Carnegie Mellon University, USA
Deborah Small, University of Pennslvania, USA
Andrew Stephen, INSEAD, France
A real world data set of 371,521 micro-financing loans reveals that people lend sub-optimally. Specifically, ceteris paribus, people are more likely to lend to an individual entrepreneur than to a group, whereas more people could be helped if they instead favored the latter. Additionally, lenders are more likely to give to others who share their gender, occupation, and first-initial.
[ to cite ]:
Jeff Galak, Deborah Small, and Andrew Stephen (2011) ,"Micro-Financing Decisions", in NA - Advances in Consumer Research Volume 38, eds. Darren W. Dahl, Gita V. Johar, and Stijn M.J. van Osselaer, Duluth, MN : Association for Consumer Research.