IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v8y2019i1p8-d299514.html
   My bibliography  Save this article

Evaluating Personal Default Risk in P2P Lending Platform: Based on Dual Hesitant Pythagorean Fuzzy TODIM Approach

Author

Listed:
  • Xiaonan Ji

    (Business School, Sichuan Normal University, Chengdu 610101, Sichuan, China)

  • Lixia Yu

    (Business School, Sichuan Normal University, Chengdu 610101, Sichuan, China)

  • Jiapei Fu

    (Business School, Sichuan Normal University, Chengdu 610101, Sichuan, China)

Abstract

An extended approach proposed in this paper is to make a more reasonable assessment of personal default risk in peer to peer (P2P) online lending platform, which reduces uncertainty while taking into account the psychological characteristics of lenders to avoid risk. The TODIM (an acronym in Portuguese of interactive and multi-criteria decision making) approach, which can describe the psychological behaviors of decision maker, has been proved to be effective to solve multi-attribute decision making (MADM) problems. The definitions of dual hesitant Pythagorean fuzzy set (DHPFS) and the processes of traditional TODIM approach are firstly introduced in this paper. Then, the TODIM approach is extended to solve the MADM problems with a dual hesitant Pythagorean fuzzy number (DHPFN). Finally, a case study evaluating the personal default risk in P2P online lending is conducted to demonstrate that the proposed approach is applicable to solve MADM problems. In addition, some comparative analyses are performed to compare the dual hesitant Pythagorean fuzzy TODIM method with the other two integrated operators of DHPFS. Through the comparisons, we conclude that the advantage of the proposed method over other methods is that it reduces uncertainty while taking into account the psychological characteristics of lenders to avoid risk. Today’s credit environment is fraught with risks, and the psychological behaviors of decision makers are important factors that cannot be ignored. For these reasons, the dual Pythagorean hesitant fuzzy TODIM method is applicable for evaluating personal default risk.

Suggested Citation

  • Xiaonan Ji & Lixia Yu & Jiapei Fu, 2019. "Evaluating Personal Default Risk in P2P Lending Platform: Based on Dual Hesitant Pythagorean Fuzzy TODIM Approach," Mathematics, MDPI, vol. 8(1), pages 1-14, December.
    • Handle: RePEc:gam:jmathe:v:8:y:2019:i:1:p:8-:d:299514
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/8/1/8/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/8/1/8/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Guo, Yanhong & Zhou, Wenjun & Luo, Chunyu & Liu, Chuanren & Xiong, Hui, 2016. "Instance-based credit risk assessment for investment decisions in P2P lending," European Journal of Operational Research, Elsevier, vol. 249(2), pages 417-426.
    2. Zhi-Ping Fan & Xiao Zhang & Yan-Ru Zhao & Fa-Dong Chen, 2013. "Multiple Attribute Decision Making With Multiple Formats Of Attribute Aspirations: A Method Based On Prospect Theory," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 12(04), pages 711-727.
    3. Bin Zhu & Zeshui Xu & Meimei Xia, 2012. "Dual Hesitant Fuzzy Sets," Journal of Applied Mathematics, Hindawi, vol. 2012, pages 1-13, May.
    4. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tang, Xinyin & Feng, Chong & Zhu, Jianping & He, Minna, 2022. "How Can We Learn from Borrowers’ Online Behaviors? The Signal Effect of Borrowers’ Platform Involvement on Their Credit Risk," SocArXiv qga8j, Center for Open Science.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kubińska, Elżbieta & Adamczyk-Kowalczuk, Magdalena & Andrzejewski, Mariusz & Rozakis, Stelios, 2022. "Incorporating the status quo effect into the decision making process: The case of municipal companies merger," Socio-Economic Planning Sciences, Elsevier, vol. 84(C).
    2. Aleksandra Król & Jerzy Księżak & Elżbieta Kubińska & Stelios Rozakis, 2018. "Evaluation of Sustainability of Maize Cultivation in Poland. A Prospect Theory—PROMETHEE Approach," Sustainability, MDPI, vol. 10(11), pages 1-19, November.
    3. Jian-Wu Bi & Tian-Yu Han & Yanbo Yao & Hui Li, 2022. "Ranking hotels through multi-dimensional hotel information: a method considering travelers’ preferences and expectations," Information Technology & Tourism, Springer, vol. 24(1), pages 127-155, March.
    4. Seow Eng Ong & Davin Wang & Calvin Chua, 2023. "Disruptive Innovation and Real Estate Agency: The Disruptee Strikes Back," The Journal of Real Estate Finance and Economics, Springer, vol. 67(2), pages 287-317, August.
    5. Herrmann, Tabea & Hübler, Olaf & Menkhoff, Lukas & Schmidt, Ulrich, 2016. "Allais for the poor," Kiel Working Papers 2036, Kiel Institute for the World Economy (IfW Kiel).
    6. Christiane Goodfellow & Dirk Schiereck & Steffen Wippler, 2013. "Are behavioural finance equity funds a superior investment? A note on fund performance and market efficiency," Journal of Asset Management, Palgrave Macmillan, vol. 14(2), pages 111-119, April.
    7. Berg, Joyce E. & Rietz, Thomas A., 2019. "Longshots, overconfidence and efficiency on the Iowa Electronic Market," International Journal of Forecasting, Elsevier, vol. 35(1), pages 271-287.
    8. Reckers, Philip M.J. & Sanders, Debra L. & Roark, Stephen J., 1994. "The Influence of Ethical Attitudes on Taxpayer Compliance," National Tax Journal, National Tax Association;National Tax Journal, vol. 47(4), pages 825-836, December.
    9. Bier, Vicki & Gutfraind, Alexander, 2019. "Risk analysis beyond vulnerability and resilience – characterizing the defensibility of critical systems," European Journal of Operational Research, Elsevier, vol. 276(2), pages 626-636.
    10. Sitinjak Elizabeth Lucky Maretha & Haryanti Kristiana & Kurniasari Widuri & Sasmito Yohanes Wisnu Djati, 2019. "Investor behavior based on personality and company life cycle," HOLISTICA – Journal of Business and Public Administration, Sciendo, vol. 10(2), pages 23-38, August.
    11. Theo Arentze & Tao Feng & Harry Timmermans & Jops Robroeks, 2012. "Context-dependent influence of road attributes and pricing policies on route choice behavior of truck drivers: results of a conjoint choice experiment," Transportation, Springer, vol. 39(6), pages 1173-1188, November.
    12. van den Bergh, J.C.J.M. & Botzen, W.J.W., 2015. "Monetary valuation of the social cost of CO2 emissions: A critical survey," Ecological Economics, Elsevier, vol. 114(C), pages 33-46.
    13. Frank D. Hodge & Roger D. Martin & Jamie H. Pratt, 2006. "Audit Qualifications of Income†Decreasing Accounting Choices," Contemporary Accounting Research, John Wiley & Sons, vol. 23(2), pages 369-394, June.
    14. Philippe Fevrier & Sebastien Gay, 2005. "Informed Consent Versus Presumed Consent The Role of the Family in Organ Donations," HEW 0509007, University Library of Munich, Germany.
    15. Ran Sun Lyng & Jie Zhou, 2019. "Household Portfolio Choice Before and After a House Purchase," Economics Working Papers 2019-01, Department of Economics and Business Economics, Aarhus University.
    16. Homonoff, Tatiana & Spreen, Thomas Luke & St. Clair, Travis, 2020. "Balance sheet insolvency and contribution revenue in public charities," Journal of Public Economics, Elsevier, vol. 186(C).
    17. Shuang Yao & Donghua Yu & Yan Song & Hao Yao & Yuzhen Hu & Benhai Guo, 2018. "Dry Bulk Carrier Investment Selection through a Dual Group Decision Fusing Mechanism in the Green Supply Chain," Sustainability, MDPI, vol. 10(12), pages 1-19, November.
    18. Senik, Claudia, 2009. "Direct evidence on income comparisons and their welfare effects," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 408-424, October.
    19. Rand Kwong Yew Low, 2018. "Vine copulas: modelling systemic risk and enhancing higher‐moment portfolio optimisation," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 58(S1), pages 423-463, November.
    20. Jose Apesteguia & Miguel Ballester, 2009. "A theory of reference-dependent behavior," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 40(3), pages 427-455, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jmathe:v:8:y:2019:i:1:p:8-:d:299514. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.