Talk:Pyramid scheme
I think that the definition of pyramid scheme (in the lead paragraph) creates confusion with "multilevel marketing" schemes. A pyramid scheme depends on new mon…
I think that the definition of pyramid scheme (in the lead paragraph) creates confusion with "multilevel marketing" schemes. A pyramid scheme depends on new money coming in to pay off the earlier members who leave. A multilevel marketing scheme depends on new members bringing in more new members. Ideally, the number of members grows exponentially. Just as a pyramid scheme collapses because the rate of new money coming in cannot grow to support the promises made to the larger membership, the multilevel marketing scheme tend to collapse because after the obvious members join, it becomes harder and harder to recruit new members. So the growth stops. In a pyramid scheme the source of income is not real (just the new members' money). In a multilevel marketing scheme, there may be real products and profitable transactions, but the rate of growth is not sustainable. I believe the lead paragraph should reduce the role of members recruiting new members. Thanks, Racepacket (talk) 01:29, 14 August 2011 (UTC)
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