Fraudulent Accounting and Other Doping Games

Aleksander Berentsen and Yvan Lengwiler

No 175, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich

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 both applications within the same model. We allow for heterogenous populations, such as highly talented versus more mediocre athletes, or high quality managers versus less able colleagues. Interestingly, for some parameters, the replicator dynamics is characterized by cycles. Thus, we may see cycles 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 types.

Keywords: replicator dynamics; cheating; doping; fraudulent accounting (search for similar items in EconPapers)
JEL-codes: C7 M4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-spo
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Citations: View citations in EconPapers (19)

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Journal Article: Fraudulent Accounting and Other Doping Games (2004)
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