From a game theoretic point of view, fraudulent accounting to embellish the financial status of a firm and the use of drugs to enhance performance in sports are very similar. We study the replicator dynamics of both applications within the same model. We allow for heterogenous populations, such as highly talented versus more mediocre athletes, or high quality managers versus less able colleagues. Interestingly, for some parameters, the replicator dynamics is characterized by cycles. Thus, we may see cycles of doping and clean sport, and cycles of fraudulent and honest accounting. Moreover, in some cases, high ability players are more likely to commit fraud than low ability types.
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Paper provided by Institute for Empirical Research in Economics - IEW in its series IEW - Working Papers with number
iewwp175.
Find related papers by JEL classification: C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory M4 - Business Administration and Business Economics; Marketing; Accounting - - Accounting
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Aleksander Berentsen & Esther Brügger & Simon Lörtscher, 2003.
"On Cheating and Whistle-Blowing,"
Diskussionsschriften
dp0302, Universitaet Bern, Departement Volkswirtschaft.
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Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
Matthias Kräkel, 2005.
"Doping in Contest-Like Situations,"
Discussion Papers
46, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
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