Recommending teams promotes prosocial lending in online microfinance

Abstract

This paper reports the results of a large-scale field experiment designed to test the hypothesis that group membership can increase participation and prosocial lending for an online crowdlending community, Kiva. The experiment uses variations on a simple email manipulation to encourage Kiva members to join a lending team, testing which types of team recommendation emails are most likely to get members to join teams as well as the subsequent impact on lending. We find that emails do increase the likelihood that a lender joins a team, and that joining a team increases lending in a short window (1 wk) following our intervention. The impact on lending is large relative to median lender lifetime loans. We also find that lenders are more likely to join teams recommended based on location similarity rather than team status. Our results suggest team recommendation can be an effective behavioral mechanism to increase prosocial lending.social identity | charitable giving | microfinance | field experiment | recommender systems

Crowdfunding and Social Capital: A Systematic Literature Review

“…measured social identity as whether borrowers belong to a team, and they found that social identity has a positive influence on crowdfunding performance Ai et al (2016). also measured social identity as group membership and confirmed that social identity increases lending activities in a field experiment.…”

The Role of Beauty in Donation Crowdfunding

“…Burtch and Chan [11] examined a crowdfunding market for medical expenses and found that crowdfunding reduces personal medical bankruptcy rates. Few studies examined donation behaviors in online microlending markets and examined several factors influencing individuals' donation behavior, including the social, cultural similarity between donors and recipients [12,24], the language of loan requests [34,36], and joining a lending team [1].…”

“…Studies showed that donors on microlending platforms tend to prefer recipients who are socially similar to themselves, and are sensitive to the language of loan requests [2,12]. Joining a lending team also promotes prosocial lending in online microlending [1]. While these studies advance our understanding of what affects prosocial lending decisions in online microfinance, we know little about whether the physical attractiveness of recipients influences prosocial donation decisions.…”

Motivating Contributions to Public Information Goods: A Field Experiment at Wikipedia

“…Like Cosley et al (2007), we also deploy a bot, ExpertIdeas Bot to post the experts' comments to the corresponding Wikipedia talk pages to standardize the format of the posts. Our approach demonstrates the potential of combining the predictive accuracy of machine learning with the causal inference of theory-guided field experiments in promoting prosocial behavior (Ai et al, 2016), representing a new wave of personalized intervention in economics.…”