Why Do People Join and Stay in Pyramid and Multi-levelMarketing Schemes

Why Do People Join and Stay in Pyramid and Multi-levelMarketing Schemes

Sažetak

Multi-level marketing (MLM) i piramidalne sheme dvije su verzije izravnog marketing modela. Piramidalne sheme ilegalan su oblik modela jer zahtijevaju pronalazak i uključivanje novih članova kako bi se unutar sheme profitiralo. Za razliku od toga, u MLM shemama moguće je profitirati isključivo na temelju prodaje proizvoda. Međutim, dvije sheme funkcioniraju na temelju istog principa i uključuju slične psihološke procese. U laboratorijskim uvjetima kao značajni demografski faktori pokazuju se religioznost, prethodna iskustva i viši percipirani osobni profit od sheme. Međutim, u uvjetima stvarnog života valja razmotriti i utjecaj roda, dobi i stupnja obrazovanja. Ektraverzija, ugodnost i
sposobnost predviđanja ishoda kao aspekti Big Five modela pokazuju se kao osobinski korelati. Neki mogući faktori vezani za socijalne procese su kultura modela i kognitivna disonanca. Svrha ovog preglednog rada analiza je ovih individualnih faktora i razmatranje kako zajedničkim djelovanjem utječu na odluku da se pridruži i ostane u modelu.

Ključne riječi: MLM, piramidalna shema, rizik za financijskom prevarom

Abstract

Multi-level marketing (MLM for short) and pyramid schemes are two similar versions of the
direct-selling model. Pyramid schemes are an illegal form of the direct-selling model because they rely on recruitment of people as a sole way to make a profit. By contrast, in MLMs one can, in theory, profit solely by product selling. However, the two operate in the same way and involve similar psychological processes. In a laboratory setting, significant demographic factors seem to be religiosity, prior experience, and higher perceived personal gain. However, in a real-life setting, factors such as gender, age, and education must also be considered. Extraversion, agreeableness, and outcome prediction have been found as personality correlates of the Big Five model. Some factors relating more to social processes seem to be the culture surrounding the business models and cognitive dissonance. The aim of this review is to analyze and explore these individual factors and examine how they influence the individual’s decision to join and remain in the business.

Keywords: financial fraud risk, MLM, pyramid scheme

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