The Ponzi Scheme 101: A Ponzi’s Life Cycle and Ways to Survive, Part 1

We construct the model of a simple Ponzi scheme, deduce how long the scheme will last and when a rational promoter will skip town.  Basically, most of the dead P2P platforms or asset management products we see in our daily lives are Ponzi schemes. Construct the Model of a Simple Ponzi Scheme Generally speaking, there are only two kinds of participants in a Ponzi scheme: promoters who attract capital by promising incredibly high profits; and investors who pay money for above-average profits. Eventually, the promoters will run away when the funds are not enough to pay back every investor. To simplify…...