Fraud: Its butterfly effect

THE butterfly effect was observed by Edward Lorenz (1961), the father of chaos theory, when he was processing weather forecasts in the computer program that he developed at the Massachusetts Institute of Technology. He said, “When a butterfly flutters its wings in one part of the world, it can eventually cause a hurricane in another.” A simple example of the butterfly effect may be found in playing billiards — the slightest differences in the angle and speed with which you hit the cue ball will always cause the pack of balls to spread in different directions. In 1975, the chaos theory was proven by mathematician James Yorke.

An example of the butterfly effect is the case of Facebook. It started in 2003 as FaceMash that allowed its visitors to compare two female student pictures and let them pick who was more beautiful. Now, the Facebook application is not only for social media purposes, but it is also being used in business. In our business environment, one may have observed how small startup companies years ago gradually flourished and later acquired competitors just to dominate the market.