The fog of fraud - Mitigating fraud by strategic ambiguity

• 成果类型: Article
• 署名作者: Lang, Matthias; Wambach, Achim
• 署名单位: Humboldt University of Berlin; University of Cologne
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2013.05.009
• 发表日期: 2013
• 页码: 255-275
• 关键词: Fraud; COMMITMENT; ambiguity; costly state verification; insurance; audit

摘要

Most insurance companies publish few data on the occurrence and detection of insurance fraud. This stands in contrast to the previous literature on costly state verification, which has shown that it is optimal to commit to an auditing strategy. The credible announcement of thoroughly auditing claim reports is a powerful deterrent. Yet, we show that uncertainty about fraud detection can be an effective strategy to deter ambiguity-averse agents from reporting false insurance claims. If, in addition, the auditing costs of the insurers are heterogeneous, it can be optimal not to commit, because committing to a fraud-detection strategy eliminates the ambiguity about auditing. Thus, strategic ambiguity can be an equilibrium outcome in the market. Even competition does not force firms to provide the relevant information. This finding is also relevant in other auditing settings, like tax enforcement. (C) 2013 Elsevier Inc. All rights reserved.