TY - JOUR
T1 - Words Matter
T2 - The Role of Readability, Tone, and Deception Cues in Online Credit Markets
AU - Gao, Qiang
AU - Lin, Mingfeng
AU - Sias, Richard
N1 - Publisher Copyright:
© The Author(s), 2022.
PY - 2023/2/9
Y1 - 2023/2/9
N2 - Using debt crowdfunding data, we investigate whether borrowers' writing style is associated with an online lender and borrower behaviors, whether the information contained in linguistic style can mitigate information asymmetry in peer-To-peer markets, and whether online investors correctly interpret the economic value of written texts. Peer-To-peer lenders bid more aggressively, are more likely to fund, and charge lower rates to online borrowers whose writing is more readable, more positive, and contains fewer deception cues. Moreover, such borrowers are less likely to default. Online investors, however, fail to fully account for the information contained in borrowers' writing.
AB - Using debt crowdfunding data, we investigate whether borrowers' writing style is associated with an online lender and borrower behaviors, whether the information contained in linguistic style can mitigate information asymmetry in peer-To-peer markets, and whether online investors correctly interpret the economic value of written texts. Peer-To-peer lenders bid more aggressively, are more likely to fund, and charge lower rates to online borrowers whose writing is more readable, more positive, and contains fewer deception cues. Moreover, such borrowers are less likely to default. Online investors, however, fail to fully account for the information contained in borrowers' writing.
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U2 - 10.1017/S0022109022000850
DO - 10.1017/S0022109022000850
M3 - Article
AN - SCOPUS:85149217921
SN - 0022-1090
VL - 58
SP - 1
EP - 28
JO - Journal of Financial and Quantitative Analysis
JF - Journal of Financial and Quantitative Analysis
IS - 1
ER -