Yan Chen,
Daniel Kahneman Collegiate Professor,
School of Information,
University of Michigan
Friday, April 22, 2016
Title: Group identity promotes altruistic peer-to-peer lending
Abstract: Charles Darwin conjectured that the main evolutionary force behind human cooperation was inter-tribal competition. While group membership has been shown to increase public goods provision and improve coordination in the laboratory, its effectiveness in sustaining real-world cooperation remains an open question. In recent years, online communities, such as Wikipedia and Kiva, are increasingly being used to bring together labor and resource contributions to help the public at large. A key challenge these communities face is how to sustain member engagement and contributions to public goods. While peer-to-peer crowd-lending sites, such as Kiva.org, have made loans to millions of borrowers from developing countries, one-third of Kiva lenders have never made a single loan. Here we show that, in a large-scale field experiment, recommending teams to lenders based on homophily or team status significantly increases lenders' likelihood to join a team compared to the control condition. Furthermore, lenders who join a team contribute significantly more compared to those who do not. The magnitude of the effect is twelve times that of the median Kiva lender's life-time contributions. Our results thus suggest team recommendation to be an effective behavioral mechanism to sustain member contributions to public goods.
Bio: Yan Chen is the Daniel Kahneman Collegiate Professor of Information at the University of Michigan. Her research focuses on mechanism design and experimental economics. The fundamental challenge Chen addresses in her research is the design of robust mechanisms when the agents involved are not perfectly rational. In meeting this challenge, she applies experimental, computational, and theoretical approaches to incorporate dynamic learning theories from economics and cognitive psychology into the static mechanism design framework.
In other work she synthesizes economic and social psychology theories to understand the effects of social identity in economic decision making, and to develop approaches to increasing member contributions in online communities. She also investigates efficient and fair mechanisms for allocating indivisible resources.
Chen has published in leading economic journals, such as the American Economic Review, Journal of Political Economy, Journal of Economic Theory, Journal of Public Economics, and Games and Economic Behavior. She has also published in conference proceedings in computer science, such as CHI and WSDM.
Chen’s research is funded by the National Science Foundation. She serves as an associate editor of Management Science, an advisory editor of Games and Economic Behavior, and an associate editor of Experimental Economics. She is the President of the Economic Science Association.
