Abstract
ABSTRACT Ponzi schemes have begun flourishing in China in recent years. However, there is a dearth of empirical research on the victims of Ponzi schemes. The current study investigated the demographic characteristics of the victims of a Ponzi scheme based on archived data of 698 people, 30 of whom were invited to participate in in-depth interviews. Based on the interview data, we investigated why the victims invested in the scheme the first time, why they invested in the same scheme repeatedly, and why many of them relentlessly participated in other similar schemes after the disclosure of the current one without effectively learning from their failures. Inspired by institutional anomie theory, the current study suggests that specific sociocultural contexts (i.e., high living expenses, a high inflation rate, fake advertisements from newspapers, an inadequate banking system, and an ambiguous legal system) play vital roles in shaping victims’ motivation, decision-making, and investment behaviors. The practical implications of the current study are also discussed.
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