Criteria for Identification of Financial Pyramid Schemes and Simulating of their Functioning
Journal Title: Бізнес Інформ - Year 2014, Vol 11, Issue 0
Abstract
In the article criteria of financial pyramid schemes are considered, which allows to formulate definitions of these phenomena on base of economic and legal positions, and to allocate financial pyramids among other types of financial relations. The main forms of functioning of financial pyramid schemes are covered. Approaches to modeling of financial pyramid schemes are generalized. The model of functioning of a financial pyramid scheme is proposed, which allows to divide the time of its existence into discrete periods. Through iterations on the basis of the proposed system of formulas, dynamics of a number of interrelated indicators of a financial pyramid can be calculated. The mathematical apparatus used in the model allows to display in diagram form different aspects of functioning of financial pyramid schemes. It is specified, that impossibility to fulfill the promised payments may result in a sudden collapse of a financial pyramid scheme, due to the cessation of contributions, though continuation of its functioning with a gradual decline in activity is possible as well.
Authors and Affiliations
Oleg Pidkhomnyi
Keywords
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