Simulating a fraud mechanism in public service delivery

This chapter illustrates a use of agent-based modeling to simulate how the dynamics of fraud occur in a public service delivery program. While fraud is a well-known problem in the public sector, the study of fraud is challenging because the behavior is subtle and adaptive. Underlying mechanisms are often not explicitly revealed. Crime data collected from investigations are biased downward because they include only those who are detected. In this chapter, I focus on modeling a fraud mechanism based on theories of crime and compare simulation outputs with results from a previous empirical study. I end this chapter with the discussion of the utility of agent-based modeling for policy inquiry.