The “Descriptive Norm and Fraud Dynamics” model demonstrates how fraudulent behavior can either proliferate or be contained within non-hierarchical organizations, such as peer networks, through social influence taking the form of a descriptive norm. This model expands on the fraud triangle theory, which posits that an individual must concurrently possess a financial motive, perceive an opportunity, and hold a pro-fraud attitude to engage in fraudulent activities (red agent). In the absence of any of these elements, the individual will act honestly (green agent).

The model explores variations in a descriptive norm mechanism, ranging from local distorted knowledge to global perfect knowledge. In the case of local distorted knowledge, agents primarily rely on information from their first-degree colleagues. This knowledge is often distorted because agents are slow to update their empirical expectations, which are only partially revised after one-to-one interactions. On the other end of the spectrum, local perfect knowledge is achieved by incorporating a secondary source of information into the agents’ decision-making process. Here, accurate information provided by an observer is used to update empirical expectations.

The model shows that the same variation of the descriptive norm mechanism could lead to varying aggregate fraud levels across different fraud categories. Two empirically measured norm sensitivity distributions associated with different fraud categories can be selected into the model to see the different aggregate outcomes.

The Communication-Based Model of Perceived Descriptive Norm Dynamics in Digital Networks (COMM-PDND) is an agent-based model specifically created to examine the dynamics of perceived descriptive norms in the context of digital network structures. The model, developed as part of a master’s thesis titled “The Dynamics of Perceived Descriptive Norms in Digital Network Publics: An Agent-Based Simulation,” emphasizes the critical role of communication processes in norm formation. It focuses on the role of communicative interactions in shaping perceived descriptive norms.

The COMM-PDND is tuned to explore the effects of normative deviance in digital social networks. It provides functionalities for manipulating agents according to their network position, and has a versatile set of customizable parameters, making it adaptable to a wide range of research contexts.