Day is the Morning? The Effects of Diurnal Variations and Interaction Modes in Online P2P Lending

Abstract

Online peer-to-peer (P2P) lending has empowered individual lenders to make investment decisions anytime and anywhere. However, there is scant research effort on exploring the time of day effect and further time-ITs relationship in the crowdfunding literature. Drawing on ego depletion theory, this study proposes a novel theoretical framework of diurnal variations on lenders’ investment decisions. We collect and analyze the data from a large online P2P lending platform in China. Based on multiple estimation models and identification strategies, we find robust evidence that lenders bid the largest amount of money in the morning, the moderate amount in the afternoon, and the smallest amount in the evening. Moreover, they bid most quickly in the afternoon, moderately in the morning, and most slowly in the evening. Furthermore, the diurnal variations in terms of bidding amount and bidding speed become more prominent in touch-based interaction, compared with mouse-based interaction. Our empirical findings contribute to extant investment decision making research in the crowdfunding literature and the time-ITs relationship discourse in the IS research, and offer critical managerial implications to marketing strategies of loan listings for platform managers.

Keywords: bidding amount, bidding speed, time of day, ego depletion theory, interaction modes