To start talking about the problem we should find out what is a financial pyramid and how does it look like.
Financial pyramid is a method of providing income to the participants by attracting new investors. Schemes like that are considered cheating. Participants promised to have high income if they attract more people to the scheme. As a rule the information about the founders of the pyramid is unknown. Those who are closer to the top of the pyramid get money from contributions of people who are situated “lower” in the structure. But the life of the pyramid is limited. Sooner or later every pyramid scheme ends as the number of new investors soon becomes fewer and fewer and there is no possibility to pay the income to the contributors. As the result the system fails and people just lose their money. The more members are there in the pyramid, the lower the chance for them to get their money back.
Here are some examples of the biggest pyramid schemes in the modern history:
- The “MMM” company was created in 1993. It began selling fake shares in 1994. About 10-15 million contributors suffered after the collapse of the pyramid;
- Bernard L. Madoff Investment Securities LLC started it activities in 1960. This company had existed till 2008 cheated more than 3 million people worldwide;
- The insurance company “Stock reserve” offered the services of insurance and promised their clients 30 percent of annual payments of insurance contributions. As the result people from USA, Russia, Europe, Turkey, Libya, Afghanistan, Kazakhstan had lost for about 10 million dollars;
- Over the past few years, Kazakhstan has suppressed the activity of 23 financial pyramids. Number of victims of the scam has reached 5000 people on the sum over 1 billion tenge
Theêó are many examples worldwide. Financial pyramids are out of law in such countries as: United States, United Kingdom, Albania, Australia, Austria, Brazil, Canada, China, Colombia, Denmark, Ukraine and etc. the main problem is that most of the pyramids try to look like companies using network marketing (MLM companies).
There a lot of reasons that motivate people to engage in pyramid schemes. Firstly it is people's desire to get rich quick in the absence of financial literacy. The psychologist Aidar Kainazarov says that people who participate in the pyramid have such qualities of character such as greed, greed, laziness, daydreaming, detachment from reality. The same qualities in the past prevented them from getting a good education, therefore they are on the low social ladder and they have to look for additional income.
Nowadays in the century of modern technologies pyramid schemes fill the spaces of the Internet. And as the result the chance to find out the creator of the scheme becomes almost impossible. Experts warn that it is very difficult to qualify this type of financial fraud. This is the result of quick growth of financial pyramids which spread their activities worldwide. The legislation against pyramid organizers in some countries is not so effective as it should be. For example: in the USA court in Houston convicted Texas billionaire Allen Stanford, found guilty of fraud. For the creation of a "Ponzi scheme" - the corporation Stanford Financial Group - businessman received 110 years prison sentence. At the same time the worldwide known Sergey Mavrodi after his first prison sentence tried to begin two more similar projects (MMM-2011 and MMM-2012). It shows the size of the gap between legal systems in different countries and incompetence of the law towards the criminals in this matter.
The most effective way to prevent the development of financial pyramids is to increase financial literacy among the people. If people understand the meaning of the problem it will be more difficult to create such a schemes.
http://pyramidschemealert.org/ - Web site dedicated to the problem
http://en.wikipedia.org/wiki/Pyramid_scheme - The principle of the pyramid scheem
http://www.neatorama.com/2008/12/22/9-most-brazen-ponzi-schemes-in-history/ - 9 Most Brazen Ponzi Schemes in History
http://www.forbes.com/sites/investopedia/2014/03/18/what-is-a-pyramid-scheme/ - What Is A Pyramid Scheme?
Some video material:
https://www.youtube.com/watch?v=zZiw15VgWoI – Difference between financial pyramids and network marketing
https://www.youtube.com/watch?v=WKG0Rlv6uIE - Spotlight with Sergey Mavrodi, MMM financial pyramid founder
Strategic resources are not visible at the start of the game: they require knowledge of a particular technology before they appear on a map. Horses, for example, do not appear until you have researched Animal Husbandry, and Iron doesn't show up until you learn Iron Working.
Strategic resources allow you to build certain units and buildings. When you construct an improvement on a strategic resource hex, it provides you a limited number of those resources, and these are allocated when you construct the associated units or buildings. You can trade strategic resources with other civilizations. The number of available strategic resources is displayed on the top bar of the main screen. Resources allocated to a unit are returned to the available pool if that unit is destroyed or disbanded.
Technology: Animal Husbandry; Improvement: Pasture Bonus: +1 Hammer Found on: Grassland, Plains, Tundra Allows: Chariot Archer, Horseman, Knight, Lancer, Cavalry, Companion Cavalry, Cossack, Sipahi, Camel Archer, Mandekalu Cavalry. Notes: The number of horses seen in a pasture varies from 2 to 4, and this number directly relates to how many resource points that resource provides. We can see in the cursor-rollover tooltips that pastures with 2 horses provide 2 points, and those with 4 horses provide 4 points.
Technology: Iron Working; Improvement: Mine Bonus: +1 Hammer Found on: Grassland, Plains, Desert, Tundra, Snow or Hills Allows: Ballista, Catapult, Mohawk Warrior, Swordsman, Longswordsman, Samurai, Trebuchet, Frigate, Ship of the Line, Forge. Notes: Like Horses, Iron occurs in deposits of different sizes, ranging from 2-6 points, and vary in visual size accordingly.
Technology: Scientific Theory; Improvement: Mine Bonus: +1 Hammer Found on: Grassland, Plains, Hills Allows: Ironclad, Factory Notes: Coal is useful mainly for building Factories.
Technology: Biology; Improvement: Oil Well or Offshore Platform Bonus: +1 Hammer Found on: Marsh, Jungle, Desert, Tundra, Snow, Ocean Allows: Destroyer, Tank, Fighter, Battleship, Submarine, Carrier, Panzer, Zero, B-17, Bomber
Technology: Electricity; Improvement: Mine Bonus: +1 Hammer Found on: Plain, Desert, Tundra, Hills Allows: Jet Fighter, Rocket Artillery, Modern Armor, Helicopter Gunship, Missile Cruiser, Mobile SAM, Hydro Plant, Spaceship Factory
Technology: Atomic Theory; Improvement: Mine Bonus: +1 Hammer Found on: Forest, Jungle, Marsh, Grassland, Plains, Desert, Tundra, Snow, Hills Allows: Atomic Bomb, Nuclear Missile, Nuclear Plant, Giant Death Robot
1 Marginal utility is an important economic concept because economists use it to determine how much of an item a consumer will buy. Positive marginal utility is when the consumption of an additional item increases the total utility. Negative marginal utility is when the consumption of an additional item decreases the total utility.
3 In economics, a cardinal utility function or scale is a utility index that preserves preference orderings uniquely up to positive affine transformations. Cardinal utility is mostly considered to be an outdated idea. Only within specific contexts such as decision making under risk, utilitarian welfare evaluations, and discounted utilities for intertemporal evaluations, is cardinal utility usually accepted. Elsewhere, such as in general consumer theory, ordinal utility is preferred.
Ordinal utility theory states that while the utility of a particular good or service cannot be measured using a numerical scale bearing economic meaning in and of itself, pairs of alternative bundles (combinations) of goods can be ordered such that one is considered by an individual to be worse than, equal to, or better than the other. This contrasts withcardinal utility theory, which generally treats utility as something whose numerical value is meaningful in its own right. The concept has been introduced first by Pareto in 1906