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Fraudulent Accounting and Other Doping Games

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  • Aleksander Berentsen
  • Yvan Lengwiler

Abstract

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 such games. We allow for heterogeneous populations, such as highly talented versus more mediocre athletes, or high-quality managers versus less able colleagues. For some parameters we find cyclical dynamics, so we may see waves 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 ones.

Suggested Citation

  • Aleksander Berentsen & Yvan Lengwiler, 2004. "Fraudulent Accounting and Other Doping Games," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(3), pages 402-415, September.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200409)160:3_402:faaodg_2.0.tx_2-y
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    References listed on IDEAS

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    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
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    3. Berentsen, Aleksander, 2002. "The economics of doping," European Journal of Political Economy, Elsevier, vol. 18(1), pages 109-127, March.
    4. Aleksander Berentsen & Esther Br�gger & Simon L�rtscher, "undated". "On Cheating and Whistle-Blowing," IEW - Working Papers 153, Institute for Empirical Research in Economics - University of Zurich.
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    Citations

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    Cited by:

    1. Bruno S. Frey & Simon Luechinger & Alois Stutzer, 2007. "Calculating Tragedy: Assessing The Costs Of Terrorism," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 1-24, February.
    2. Kräkel, Matthias, 2005. "Doping in Contest-Like Situations," Bonn Econ Discussion Papers 14/2005, University of Bonn, Bonn Graduate School of Economics (BGSE).
    3. Westmattelmann, Daniel & Sprenger, Marius & Hokamp, Sascha & Schewe, Gerhard, 2020. "Money matters: The impact of prize money on doping behaviour," Sport Management Review, Elsevier, vol. 23(4), pages 688-703.
    4. Sebastian Bervoets & Bruno Decreuse & Mathieu Faure, 2014. "A Renewed Analysis of Cheating in Contests: Theory and Evidence from Recovery Doping," AMSE Working Papers 1441, Aix-Marseille School of Economics, France, revised Jun 2015.
    5. Kräkel, Matthias, 2006. "Doping and Cheating in Contest-Like Situations," IZA Discussion Papers 2059, Institute of Labor Economics (IZA).
    6. Haß, Lars Helge & Müller, Maximilian A. & Vergauwe, Skrålan, 2015. "Tournament incentives and corporate fraud," Journal of Corporate Finance, Elsevier, vol. 34(C), pages 251-267.
    7. Bruno Frey, 2005. "‘‘Just forget it.’’ Memory distortions as bounded rationality," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 4(1), pages 13-25, June.
    8. Jiong Gong & R. Preston McAfee & Michael A. Williams, 2016. "Fraud Cycles," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 172(3), pages 544-572, September.
    9. Müller, Daniel, 2013. "The Doping Threshold in Sport Contests," Working papers 2013/05, Faculty of Business and Economics - University of Basel.
    10. Berno Buechel & Eike Emrich & Stefanie Pohlkamp, 2016. "Nobody’s Innocent," Journal of Sports Economics, , vol. 17(8), pages 767-789, December.
    11. Aleksander Berentsen & Esther Bruegger & Simon Loertscher, "undated". "Heterogeneity, Local Information, and Global Interaction," IEW - Working Papers 182, Institute for Empirical Research in Economics - University of Zurich.
    12. Alexander Dilger & Bernd Frick & Frank Tolsdorf, 2007. "Are Athletes Doped? Some Theoretical Arguments And Empirical Evidence," Contemporary Economic Policy, Western Economic Association International, vol. 25(4), pages 604-615, October.
    13. Volker Robeck, 2014. "Professional Cycling and the Fight against Doping," MAGKS Papers on Economics 201456, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    14. Nicolas Eber, 2012. "Doping and Anti-doping Measures," Chapters, in: Wolfgang Maennig & Andrew Zimbalist (ed.), International Handbook on the Economics of Mega Sporting Events, chapter 12, Edward Elgar Publishing.
    15. Nicolas Eber, 2011. "Fair play in contests," Journal of Economics, Springer, vol. 103(3), pages 253-270, July.
    16. Buechel, Berno & Emrich, Eike & Pohlkamp, Stefanie, 2013. "Nobody's innocent: the role of customers in the doping dilemma," MPRA Paper 44627, University Library of Munich, Germany.
    17. Krakel, Matthias, 2007. "Doping and cheating in contest-like situations," European Journal of Political Economy, Elsevier, vol. 23(4), pages 988-1006, December.

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    More about this item

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting

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