A Marketing Scheme for Making Money off Innocent People: A User's Manual
Working Papers from Cornell University, Center for Analytic Economics
Firms often give away free goods with the product that they sell. Firms often give stock options to their top management and other employees. Mixing these two practices--giving stock options to consumers who buy the firm's product--, creates a deadly brew. Large numbers of consumers can be lured into buying this product, giving the entrepreneur huge profits and the consumers a growing profit share. But this is a camouflaged Ponzi that will ultimately crash. By analogy it is argued that the common practice of giving stock options to employees can be a factor behind financial crashes.
JEL-codes: D92 G18 G32 L20 M30 (search for similar items in EconPapers)
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Journal Article: A marketing scheme for making money off innocent people: A user's manual (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:corcae:09-09
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