yielding equilibria exhibiting various degrees of inefficiencies and fraud. The variety of results has fostered the impression …

We examine firm managers' incentives to commit fraud in a model where firms seek funding from investors and investors … can monitor firms at a cost in order to get more precise information about firm prospects. We show that fraud incentives … funded without committing fraud, whereas in bad times investors are more vigilant and it is harder to commit fraud …

democracies. The incumbent can prevent credible challengers from running, organize vote fraud, or even physically eliminate the …