title: Beauty premium: Event-related potentials evidence of how physical attractiveness matters in online peer-to-peer lending.
abstract: Although it is well known that attractiveness-based impressions affect the labor market, election outcomes and many other social activities, little is known about the role physical attractiveness plays in financial transactions. With the development of online finance, peer-to-peer lending has become one of the most important ways in which businesses or individuals raise capital. However, because of information asymmetry, the lender must decide whether or not to lend money to a stranger based on limited information, resulting in their decision being influenced by many other factors. In the current study, we investigated how potential borrowers' facial attractiveness influenced lenders' attitudes toward borrowers' repayment behavior at the brain level by using event-related potentials. At the priming stage, photos of attractive borrowers induced smaller N200 amplitude than photos of unattractive borrowers. Meanwhile, at the feedback stage, compared with the condition of repaying on time, breach of repayment from unattractive borrowers induced larger feedback-related negativity (FRN) amplitude, which was a frontal-central negative deflection and would be enhanced by the unexpected outcome. Furthermore, smaller P300 amplitude was also elicited by the condition of not repaying on time. These differences in the FRN and P300 amplitudes were not observed between negative and positive feedback from attractive borrowers. Therefore, our findings suggest that the beauty premium phenomenon is present in online peer-to-peer lending and that lenders were more tolerant toward attractive borrowers' dishonest behavior.
authors.affiliation: Business School, Ningbo University, Ningbo, China; Academy of Neuroeconomics and Neuromanagement at Ningbo University, Ningbo, China.
authors.forename: Jia
authors.initials: J
authors.lastname: Jin
authors.affiliation: Business School, Ningbo University, Ningbo, China; Academy of Neuroeconomics and Neuromanagement at Ningbo University, Ningbo, China; School of Public Affairs, Zhejiang University, Hangzhou, China.
authors.forename: Bonai
authors.initials: B
authors.lastname: Fan
authors.affiliation: College of Economics and Management, China Jiliang University, Hangzhou, China.
authors.forename: Shenyi
authors.initials: S
authors.lastname: Dai
authors.affiliation: Business School, Ningbo University, Ningbo, China; Academy of Neuroeconomics and Neuromanagement at Ningbo University, Ningbo, China; Institute of Neural Management Sciences, Zhejiang University of Technology, Hangzhou, China. Electronic address: maqingguo3669@zju.edu.cn.
authors.forename: Qingguo
authors.initials: Q
authors.lastname: Ma
mesh_terms: D000328:Adult; D001504:Beauty; D001921:Brain / Q000502:physiology; D004569:Electroencephalography; D018913:Event-Related Potentials, P300; D005071:Evoked Potentials; D005145:Face; D030141:Feedback, Psychological; D005260:Female; D005717:Games, Experimental; D006801:Humans; D007398:Interpersonal Relations; D008297:Male; D011930:Reaction Time; D012309:Risk-Taking; D055815:Young Adult
keywords: ERPs; FRN; P300; Peer-to-peer lending; Physical attractiveness