Analyzing Psychological Factors in Ponzi Scheme Vulnerability: A Case Study Approach.

• In Event: Special Topics in Victimization: Identity Theft, Ponzi Schemes, and Artificial Intelligence

Abstract

This research utilizes a case study approach to delve into the psychological factors influencing vulnerability to Ponzi schemes, exploring trust, over-optimism, and susceptibility to persuasion. The study aims to contribute insights into how specific traits and cognitive biases render individuals susceptible to Ponzi scheme victimization. Through in-depth interviews, surveys, and document analysis, the research focuses on understanding the psychological characteristics of Ponzi scheme victims. The findings reveal a correlation between high levels of trust, over-optimism, and susceptibility to external persuasion, particularly through charismatic communication, and participation in Ponzi schemes. This underscores the significance of psychological factors in determining vulnerability. Trust, over-optimism, and susceptibility to persuasion emerge as pivotal elements contributing to individuals' involvement in fraudulent investment schemes. The case study approach provides a nuanced understanding of the interplay between these psychological traits and Ponzi scheme victimization. The study advocates for targeted interventions and educational initiatives to enhance public awareness and mitigate the impact of psychological vulnerabilities on financial decision-making, emphasizing the need for proactive measures in addressing Ponzi scheme susceptibility at the psychological level.

Author

• Ojeifoh Okosun, Texas Southern University