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Product market competition and fraud in a model of price competition with horizontally differentiated products

Author

Listed:
  • Rainer Andergassen

    (University of Bologna)

Abstract

We investigate in a model of horizontally differentiated products the effect of product market competition on fraudulent behavior. We show that the relationship between fraud and competition depends on the source of variation of competition (number of firms, product substitutability and market size) as well as on the endogeneity or exogeneity of industry structure.

Suggested Citation

  • Rainer Andergassen, 2015. "Product market competition and fraud in a model of price competition with horizontally differentiated products," Economics Bulletin, AccessEcon, vol. 35(3), pages 1669-1674.
    • Handle: RePEc:ebl:ecbull:eb-15-00227
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    File URL: http://www.accessecon.com/Pubs/EB/2015/Volume35/EB-15-V35-I3-P168.pdf
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    References listed on IDEAS

    as
    1. Guojin Gong & Henock Louis & Amy X. Sun, 2008. "Earnings Management and Firm Performance Following Open‐Market Repurchases," Journal of Finance, American Finance Association, vol. 63(2), pages 947-986, April.
    2. Tracy Yue Wang & Andrew Winton & Xiaoyun Yu, 2010. "Corporate Fraud and Business Conditions: Evidence from IPOs," Journal of Finance, American Finance Association, vol. 65(6), pages 2255-2292, December.
    3. David Bruner & Michael McKee & Rudy Santore, 2008. "Hand in the Cookie Jar: An Experimental Investigation of Equity-Based Compensation and Managerial Fraud," Southern Economic Journal, John Wiley & Sons, vol. 75(1), pages 261-278, July.
    4. Paul Povel & Rajdeep Singh & Andrew Winton, 2007. "Booms, Busts, and Fraud," The Review of Financial Studies, Society for Financial Studies, vol. 20(4), pages 1219-1254.
    5. Goldman, Eitan & Slezak, Steve L., 2006. "An equilibrium model of incentive contracts in the presence of information manipulation," Journal of Financial Economics, Elsevier, vol. 80(3), pages 603-626, June.
    6. Andergassen, Rainer, 2010. "Product market competition, incentives and fraudulent behavior," Economics Letters, Elsevier, vol. 107(2), pages 201-204, May.
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    Cited by:

    1. Wang, Tracy Yue & Winton, Andrew, 2021. "Industry informational interactions and corporate fraud," Journal of Corporate Finance, Elsevier, vol. 69(C).

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    More about this item

    Keywords

    fraudulent behavior; competition; Bayesian Nash equilibrium;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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