A Marketing Scheme for Making Money off Innocent People: A User’s Manual

Kaushik Basu

Working Papers from eSocialSciences

Abstract: 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. The aim of the paper is to help create a better regulatory structure.

Keywords: employees; money; marketing; financial; entrepreneur; stock options; financial scams; product bundling; firms; consumers; employees; product; profit share; strategy; law; loans (search for similar items in EconPapers)
Date: 2009-12
New Economics Papers: this item is included in nep-mic and nep-mkt
Note: Institutional Papers
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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