The authors study the welfare effects of the transition of online debt crowdfunding from the older “peer-to-peer” model to the “marketplace” model, where the crowdfunding platform sells diversified loan portfolios to investor. Authors develop an equilibrium model of debt crowdfunding capturing platform design (peer-to-peer or marketplace) and lender preferences over loan and portfolio product characteristics, and we estimate it on a novel database on credit at a large online platform based in China.

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