Open Access Journal Article

Psychopathy, prospect theory, and the Madoff Curve: a dual behavioral neuroscience and behavioral economic framework for understanding White Collar Crime

by Eric C. Prichard a,* orcid  and  Adam J. McKee a orcid
a
School of Social and Behavioral Sciences, University of Arkansas at Monticello, Monticello, USA
*
Author to whom correspondence should be addressed.
EAL  2023 2(2):23; https://doi.org/10.58567/eal02020005
Received: 22 March 2023 / Accepted: 15 May 2023 / Published Online: 23 May 2023
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Abstract

Reckless behavior by business leaders can be a systemic risk for individual firms and the economies in which the firms exist. We propose that a synthesis of behavioral economics, in particular prospect theory, and the study of psychopathy may help researchers better understand why some business leaders engage in high-risk criminal activity. We propose that psychopathy is associated with an abnormal response to negative consequences. Where traditional Prospect Theory proposes that people are loss avoidant, we propose that people high on the trait of psychopathy may be more motivated by gains and will be risk seeking in high reward/high risk situations for which most people will avoid risk. We propose two empirical study designs that may be used to test the framework in the future.

Keywords: Prospect theory, psychopathy, behavioral economics, White-Collar Crime, decision making;
Copyright: © 2023 by Prichard and McKee. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
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ACS Style
Prichard, E. C.; McKee, A. J. Psychopathy, prospect theory, and the Madoff Curve: a dual behavioral neuroscience and behavioral economic framework for understanding White Collar Crime. Economic Analysis Letters, 2023, 2, 23. https://doi.org/10.58567/eal02020005
AMA Style
Prichard E C, McKee A J. Psychopathy, prospect theory, and the Madoff Curve: a dual behavioral neuroscience and behavioral economic framework for understanding White Collar Crime. Economic Analysis Letters; 2023, 2(2):23. https://doi.org/10.58567/eal02020005
Chicago/Turabian Style
Prichard, Eric C.; McKee, Adam J. 2023. "Psychopathy, prospect theory, and the Madoff Curve: a dual behavioral neuroscience and behavioral economic framework for understanding White Collar Crime" Economic Analysis Letters 2, no.2:23. https://doi.org/10.58567/eal02020005
APA style
Prichard, E. C., & McKee, A. J. (2023). Psychopathy, prospect theory, and the Madoff Curve: a dual behavioral neuroscience and behavioral economic framework for understanding White Collar Crime. Economic Analysis Letters, 2(2), 23. https://doi.org/10.58567/eal02020005

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