Institute of Internet Finance & Institute of Chinese Financial Studies, Southwestern University of Finance and Economics, CHINA, and Information Science & Technology, The Pennsylvania State University, 76 University Drive, Hazelton, PA 18202 U.S.A.
This paper investigates how friendship relationships act as pipes, prisms, and herding signals in a large online, peer-to-peer (P2P) lending site. By analyzing decisions of lenders, we find that friends of the borrower, especially close offline friends, act as financial pipes by lending money to the borrower. On the other hand, the prism effect of friends' endorsements via bidding on a loan negatively affects subsequent bids by third parties. However, when offline friends of a potential lender, especially close friends, place a bid, a relational herding effect occurs as potential lenders are likely to follow their offline friends with a bid.
Organizational crisis management has traditionally favored a centralized plan-and-control approach. This study explores the possibility for an orderly crisis management process to arise unintentionally from decentralized and spontaneous actions in an online community (i.e., self-organization). Based on complex adaptive systems theory, a multilevel model is developed to account for the logical relation between individual-level actions and interactions in an online community and an organizational-level orderly and rational crisis management process, as described by the organizational crisis management literature. We apply this multilevel model to an analysis of 89,596 posts from an online community that was deeply embedded in an earthquake-induced organizational crisis. Results indicate that fluctuation of message content themes in this online community served to energize continuous input from ordinary organization members. These input actualized new possibilities offered by the technology platform for crisis management actions (i.e., actualized IT affordances). Concatenation of immediate impacts of message content themes and actualized IT affordances formed feedback loops that moderated the crisis management activities toward an efficient trajectory. Our findings challenge the traditional assumption that macro-level order requires micro-level order-seeking behaviors. They suggest the viability of self-organization as a new source of organizational order that complements the traditional centralized plan-and-control approach. Theoretical and empirical implications for harnessing the power of ordinary organization members connected by today’s technology platforms are discussed.