Social and Behavioral Sciences Commons^™

Multilevel Marketing Diffusion And The Risk Of Pyramid Scheme Activity: The Case Of Fortune Hi‐Tech Marketing In Montana, Stacie A. Bosley, Kim Mckeage

School of Business All Faculty Scholarship

While statisticians have simulated the expected rate of growth in pyramid schemes, this research examines actual data on the spread of an alleged pyramid scheme in Montana. Fortune Hi-Tech Marketing (FHTM) was a multilevel marketing firm, sued by six states and the Federal Trade Commission and permanently shut down in 2014. Data from a settlement with the State of Montana provide a population of participants in a geographic region with definable markets and offer unique insights into local contagion. The authors analyze the pattern of FHTM adoption within a diffusion-of-innovation framework. The findings confirm that nearly all adoption results from …