On Tuesday, October 6, Professor Lars Hornuf will present his paper "Paralyzed by Shock: The Portfolio Formation Behavior of Peer-to-Business Lending Investors" at the 4th European Alternative Finance Research Conference. The paper was written in collaboration with Professor Dr. Gregor Dorfleitner and Dr. Martina Weber from the University of Regensburg. In this article, the authors study the investor behavior on a leading peer-to-business lending platform and identify a new investment mistake – a default shock bias. First, they find that investors stop investing in new loans and cease from diversifying their portfolio after experiencing a loan default. The default shock significantly worsens the risk-return profile of investors’ loan portfolios. The defaults investors experience are often not beyond what could have been expected based on the information that was provided by the platform ex-ante. Second, investment experience on the platform is related to better investment decisions in general, but does not reduce the default shock bias. These findings have important implications not only for the behavioral finance literature, but also more generally for new forms of Internet-based finance. The full article can be downloaded here: papers.ssrn.com/sol3/papers.cfm