Back to the calendar
Oct
3
UCLouvain Economics Seminar - Yair Antler (Tel Aviv University)

Yair Antler

(Tel Aviv University)

Will give a presentation on

Multilevel Marketing: Pyramid-Shaped Schemes or Exploitative Scams

Abstract:

Motivated by the growing discussion on the legitimacy of multilevel marketing schemes and their resemblance to pyramid scams, we compare the two phenomena based on their underlying compensation structures. We identify the conditions on the tendency of agents to spread information by word of mouth, under which a principal can design a pyramid scam to exploit a network of agents whose beliefs are coarse. We find that a pyramid scam is sustainable only if its underlying reward scheme compensates each participant based on at least two levels of recruitment, i.e., the people he recruits and the people they recruit.

Date
03 October
Time
12:45 - 14:00
Location
Doyen 22
Place des Doyens, 1
Ottignies-Louvain-la-Neuve,
Categories