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Fraud dynamics

Projects with this topic

  • The aim of the project is to develop an empirically more sound fraud dynamics model. To this end, we re-implement parts of the fraud dynamics and controls model by Davis and Pesch (2013) and replace the original model's simple contagion mechanism by a more complex contagion mechanism. The latter is inspired by the operational social norm definition proposed by Bicchieri (2006). It introduces a bias in individual agents' behavioral decision-making when chosing between honesty and fraud. Next, we calibrate the model with two empirically measured norm sensitivity distributions and run simulation experiments.