Contract Pricing and Market Efficiency: Can Peer-to-Peer Internet Credit Markets Improve Allocative Efficiency?

This paper studies how platform-controlled contract pricing in peer-to-peer credit markets affects participant behavior and allocative efficiency when borrowers and lenders are price takers. Using structural econometric models and counterfactual pricing scenarios, it evaluates welfare outcomes under platform-set prices versus prices determined by supply and demand, with implications for regulation of sharing-economy marketplaces.
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