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Reducing the Risk of Fraud in Financial Market: Psychosocial Drivers and Enactment-Based Perspective

Author

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  • Emmanuel Laffort

    (CREG - Centre de recherche et d'études en gestion - UPPA - Université de Pau et des Pays de l'Adour)

  • Emmanuelle Cargnello-Charles

    (CREG - Centre de recherche et d'études en gestion - UPPA - Université de Pau et des Pays de l'Adour)

Abstract

Operators (fund managers and traders) are regularly involved in fraudulent operations. Their cost amounted to over $40 billion in the last decade. We think that one of the main reasons is related to the nature of interrelations between risk-controllers and operators. Controllers are often too poorly skilled and operators consider themselves as superior human beings and are therefore reluctant to explain themselves. Existing structures encourage this. That is why we propose an approach based on the concept of enactment, which will entail a morphogenesis of structures. This will help operators realize that they are just ordinary people, which will then help them suffer less from their working life. As a result, they will develop careful interrelations, resulting in a lesser risk of fraud. We also provide a tool to measure the quality of these enactments and to perform them: the appropriation scales. Realizing that they are not asked to do extraordinary things, operators will less suffer psychologically and be less tempted to fraud to escape this pain.

Suggested Citation

  • Emmanuel Laffort & Emmanuelle Cargnello-Charles, 2014. "Reducing the Risk of Fraud in Financial Market: Psychosocial Drivers and Enactment-Based Perspective," Post-Print hal-02010166, HAL.
    • Handle: RePEc:hal:journl:hal-02010166
    Note: View the original document on HAL open archive server: https://univ-pau.hal.science/hal-02010166
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    References listed on IDEAS

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    1. Christine Jolls, 2007. "Behavioral Law and Economics," NBER Working Papers 12879, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Reurink, Arjan, 2016. "Financial fraud: A literature review," MPIfG Discussion Paper 16/5, Max Planck Institute for the Study of Societies.

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