Crowdfunding as gambling: evidence from repeated natural experiments

Lenders in Prosper, one of the largest lending markets in the U.S., reduce their activity when playing multistate Powerball or Mega Millions lottery jackpot becomes attractive. This finding suggests that the desire for sensation seeking is an underlying motivation for participating in peer-to-peer crowdfunding markets; the thrill of winning a large lottery jackpot fulfills some lenders' desire for novelty and sensation seeking, thus decreasing their lending activity. We discuss our findings' implications for lenders, borrowers, platform organizers, and policymakers. © 2021 Elsevier B.V.