2011/02/01 by Michal Herzenstein, Scott Sonenshein, Utpal M. Dholakia · 383 citations
Business, Management and Accounting · Economics, Econometrics and Finance · Psychology · Social Sciences · #Actuarial science #Business #Economics #FinTech, Crowdfunding, Digital Finance #Finance #Identity (music) #Knowledge Management and Sharing #Loan #Microfinance and Financial Inclusion #Narrative #Political science #Psychology #Public relations #Social psychology #Trustworthiness
paper · doi:10.1509/jmkr.48.spl.s138
published in Journal of Marketing Research 48(SPL) (SAGE Publishing)
openalex publication_date 2011/02/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/26
This research examines how identity claims constructed in narratives by borrowers influence lender decisions about unsecured personal loans. Specifically, do the number of identity claims and their content influence lending decisions, and can they predict the longer-term performance of funded loans? Using data from the peer-to-peer lending website Prosper.com , the authors find that unverifiable information affects lending decisions above and beyond the influence of objective, verifiable information. As the number of identity claims in narratives increases, so does loan funding, whereas loan performance suffers, because these borrowers are less likely to pay back the loan. In addition, identity content plays an important role. Identities focused on being trustworthy or successful are associated with increased loan funding but ironically are less predictive of loan performance than other identities (i.e., moral and economic hardship). Thus, some identity claims aim to mislead lenders, whereas others provide true representations of borrowers.