Séminaire du groupe de recherche Finance : Carole GRESSE et Prince TEYE

Carole GRESSE (Université Paris Dauphine - PSL, DRM, CNRS)                                      

Geographical-Proximity Bias in P2B Crowdlending Strategies

Carole Gresse
(Université Paris Dauphine - PSL, DRM, CNRS)
Hugo Marin
(Université Paris Dauphine - PSL, DRM, CNRS)

Using data from a peer-to-business crowdlending platform that exploits an auction-driven system to fund corporate loans, we show that non-professional investors are subject to a geographical-proximity bias. They are more likely to win the auctions of borrowers located close to their place of residence notwithstanding that they are not better informed about their creditworthiness. Unexpectedly, this behavioral bias distorts the loan rate discovery process by increasing the cost of funding for borrowers. This adverse e_ect results from the greater ability of local investors to submit winning bids at an early stage. This ability is gained from their experience in previous auctions of geographically close borrowers. This suggests that the familiarity feeling stemming from geographical closeness strengthens investor attention, and thereby improves lenders' knowledge about the dynamics of the order ow in local borrowers' auctions.
 


 

Prince TEYE (Université de Lyon, Jean Moulin, iaelyon, Magellan)

How Nudges May Promote Professional Skepticism in Audit ?
     
Jean-François Gajewski
(Université de Lyon, Jean Moulin, iaelyon, Magellan)
Marco Heimann
(Université de Lyon, Jean Moulin, iaelyon, Magellan)
Pierre-Majorique Léger
(HEC Montréal)
Prince Teye
(Université de Lyon, Jean Moulin, iaelyon, Magellan)

« While the effectiveness of nudges is widely acknowledged in the behavioral sciences, very little is known about their usefulness and applications in accounting and auditing. This paper contextualizes nudge theory into the financial audit setting and offers experimental verification of the effects of social norms and justification nudges on audit behavior. In two in between subject experiments (social norms x justification 2x2) we measure the effects of nudges on professional skepticism, a marker of audit quality. In the second experiment we use eye tracking during an audit task to infer the cognitive mechanism at play. We find a positive effect of nudges on professional skepticism in both experiments. We further find that nudged conditions are associated with higher fixation counts and revisits of accounts in the assessment of audit evidence. Moreover, the effect of nudges on auditors professional skepticism is mediated by visual attention. By examining the interactions between nudges, visual attention and audit, we highlight how nudge theory could be drawn upon to effectively enhance audit performance. »