Research
Publication
"Gaining a Seat at the Table: Enhancing the Attractiveness of Online Lending for Institutional Investors" (with Ram Gopal, Xiao Qiao, and Moris Strub), Forthcoming, Information Systems Research [DOI]
Online interactive dashboard with Tableau: Link to Dashboard
Working Paper
"Doing Well by Doing Good: Interest Rate Determination for Unsecured Personal Loans" (with Ram Gopal, Xiao Qiao, and Moris Strub), Job Market Paper
Peer-reviewed conference proceedings: Workshop on Information Technologies and Systems (WITS 2023)
Abstract: Perhaps the most important aspect of an unsecured personal loan is its interest rate. Interest rates that accurately reflect risk are not only important from a financial perspective but also promote financial inclusion and fairness in credit markets. In practice, interest rates often fail to accurately reflect loan risk, leading to sub-optimal credit allocation and biases of borrowers. We propose a novel method of interest rate determination based on the economic rationale that all borrowers should have fair access to credit at prices commensurate to their repayment risk. The implication of this rationale is that interest rates should provide the same risk-return trade-off across loans. We evaluate the pricing framework using loan samples from LendingClub. Compared with LendingClub's existing pricing strategy, our methodology effectively reduces the interest rate disparity between borrowers with different credit scores by 38.7% and removes the existing bias in interest rates against African American borrowers. Meanwhile, on average, loans maintain their return on investment for lenders under the new interest rates. Our results show that by setting interest rates that reflect the inherent risk of loans, online lending platforms have the potential to improve social welfare by promoting fairer lending practices – doing well by doing good.
Presentations
POMS-HK International Conference, Hong Kong SAR, China, Jan 2024
Workshop on Information Technologies and Systems, Online, Dec 2023
Annual Meeting of Financial Engineering and Financial Risk Management Branch of the OR Society of China, Fuzhou, China, Nov 2023
INFORMS Annual Meeting, Phoenix, Arizona, U.S., Oct 2023
Applied Economics Student Workshop, National University of Singapore, Sept 2023
Asia Meeting of Econometric Society in China, Tsinghua University, Beijing, China, Jun 2023
Global AI Finance Research Conference, Singapore, Dec 2022
New Zealand Finance Meeting, University of Auckland, Online, Dec 2022
PhD Student Workshop, City University of Hong Kong, Online, Nov 2022
INFORMS Annual Meeting, Indianapolis, Indiana, U.S., Oct 2022
Conference on Information Systems and Technology (CIST), Indianapolis, U.S., Oct 2022
Greater China Area Finance Conference, Xiamen University, Online, Jun 2022
Research Seminars
ESSEC Business School, Dec 2023
University of Florida, Warrington College of Business, Dec 2023
University of Delaware, Lerner College of Business and Economics, Dec 2023
Bentley University, Dec 2023
University of Science and Technology of China, School of Management, Dec 2023
Stevens Institute of Technology, School of Business, Nov 2023
University of Warwick, Warwick Business School, Oct 2023