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Fraud cycles


  • Gong, Jiong
  • McAfee, R. Preston
  • Williams, Michael


Fraud is an ancient crime and one that annually causes hundreds of billions of dollars in losses. We examine the behavioral patterns over time of different types of frauds, which illustrate cyclical frequencies. We develop an evolutionary theory that suggests cyclic behavior in frauds should be common.

Suggested Citation

  • Gong, Jiong & McAfee, R. Preston & Williams, Michael, 2011. "Fraud cycles," MPRA Paper 28934, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:28934

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    References listed on IDEAS

    1. J. V. Hansen & J. B. McDonald & W. F. Messier, Jr. & T. B. Bell, 1996. "A Generalized Qualitative-Response Model and the Analysis of Management Fraud," Management Science, INFORMS, vol. 42(7), pages 1022-1032, July.
    2. Noe, Thomas H & Rebello, Michael J, 1994. "The Dynamics of Business Ethics and Economic Activity," American Economic Review, American Economic Association, vol. 84(3), pages 531-547, June.
    3. 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 402-402, September.
    4. Ed Hopkins, 2002. "Two Competing Models of How People Learn in Games," Econometrica, Econometric Society, vol. 70(6), pages 2141-2166, November.
    5. M. J. Farrell, 1970. "Some Elementary Selection Processes in Economics," Review of Economic Studies, Oxford University Press, vol. 37(3), pages 305-319.
    6. Daniel Sutter, 2003. "Detecting and Correcting Election Fraud," Eastern Economic Journal, Eastern Economic Association, vol. 29(3), pages 433-451, Summer.
    7. Shonkwiler, J. Scott & Spreen, Thomas H., 1986. "Statistical Significance and Stability of the Hog Cycle," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 18(02), pages 227-234, December.
    8. Paul Povel & Rajdeep Singh & Andrew Winton, 2007. "Booms, Busts, and Fraud," Review of Financial Studies, Society for Financial Studies, vol. 20(4), pages 1219-1254.
    9. Freeman, Scott & Grogger, Jeffrey & Sonstelie, Jon, 1996. "The Spatial Concentration of Crime," Journal of Urban Economics, Elsevier, vol. 40(2), pages 216-231, September.
    10. Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
    11. Friedman, Daniel, 1991. "Evolutionary Games in Economics," Econometrica, Econometric Society, vol. 59(3), pages 637-666, May.
    12. Hyman, David A, 2001. "Health Care Fraud and Abuse: Market Change, Social Norms, and the Trust "Reposed in the Workmen."," The Journal of Legal Studies, University of Chicago Press, vol. 30(2), pages 531-567, June.
    13. Feldman, Roger, 2001. "An Economic Explanation for Fraud and Abuse in Public Medical Care Programs," The Journal of Legal Studies, University of Chicago Press, vol. 30(2), pages 569-577, June.
    14. Lui, Francis T., 1986. "A dynamic model of corruption deterrence," Journal of Public Economics, Elsevier, vol. 31(2), pages 215-236, November.
    15. James D. Montgomery, 2010. "Intergenerational Cultural Transmission as an Evolutionary Game," American Economic Journal: Microeconomics, American Economic Association, vol. 2(4), pages 115-136, November.
    16. Larry Samuelson, 1998. "Evolutionary Games and Equilibrium Selection," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262692198, January.
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    Blog mentions

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    1. Fraud cycles
      by Economic Logician in Economic Logic on 2011-03-30 19:38:00


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    Cited by:

    1. Marisa Agostini & Giovanni Favero, 2012. "Accounting fraud, business failure and creative auditing: A micro-analysis of the strange case of Sunbeam Corp," Working Papers 12, Department of Management, Università Ca' Foscari Venezia, revised Mar 2013.

    More about this item


    fraud; cycle; steady state;

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • A10 - General Economics and Teaching - - General Economics - - - General
    • D00 - Microeconomics - - General - - - General

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