{"type":"ScholarlyArticle","title":"A Market Clearing Solution for Social Lending","authors":[{"name":"Ning Chen","slug":"ning-chen","given":"Ning","family":"Chen","affiliation":""},{"name":"Arpita Ghosh","slug":"arpita-ghosh","given":"Arpita","family":"Ghosh","affiliation":""}],"abstract":"The social lending market, with over a billion dollars in loans, is a two-sided matching market where borrowers specify demands and lenders specify total budgets and their desired interest rates from each acceptable borrower. Because different borrowers correspond to different risk-return profiles, lenders have preferences over acceptable borrowers; a borrower prefers lenders in order of the interest rates they offer to her. We investigate the question of what is a computationally feasible, 'good', allocation to clear this market. We design a strongly polynomial time algorithm for computing a Pareto-efficient stable outcome in a two-sided many-to-many matching market within differences, and use this to compute an allocation for the social lending market that satisfies the properties of stability — a standard notion of fairness in two-sided matching markets — and Pareto efficiency; and additionally addresses envy-freeness amongst similar borrowers and risk diversification for lenders.","doi":"10.5591/978-1-57735-516-8/IJCAI11-037","url":"https://ijcai.org/proceedings/2011/37","pdf":"https://ijcai.org/proceedings/2011/0037.pdf","markdown":"https://ijcai.org/proceedings/2011/37.md","bibtex":"https://ijcai.org/proceedings/2011/bibtex/37","volume":{"slug":"2011","title":"Proceedings of the Twenty-Second International Joint Conference on Artificial Intelligence","short_title":"IJCAI 2011","url":"https://ijcai.org/proceedings/2011/","year":2011,"location":"Barcelona, Catalonia, Spain","dates":"16–22 July 2011","editors":"Toby Walsh","isbn":"978-1-57735-512-0; 978-1-57735-513-7; 978-1-57735-514-4; 978-1-57735-515-1; 978-1-57735-516-8","publisher":"AAAI Press/International Joint Conferences on Artificial Intelligence","doi_prefix":""},"section":null,"track":"","number":37,"pages":{"first":152,"last":156},"keywords":[],"videos":[],"references":[],"license_note":"Copyright International Joint Conferences on Artificial Intelligence."}