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On cheating, doping and whistleblowing

Aleksander Berentsen (), Esther Bruegger and Simon Loertscher ()

European Journal of Political Economy, 2008, vol. 24, issue 2, 415-436

Abstract: We study the role of whistleblowing in the following inspection game. Two agents who compete for a prize can either behave legally or illegally. After the competition, a controller investigates the agents' behavior. This inspection game has a unique Bayesian equilibrium in mixed strategies. We then add a whistleblowing stage, where the controller asks the loser to blow the whistle. We show that our whistleblowing mechanism reduces the frequencies of cheating, is less costly in terms of test frequencies, and leads to a strict Pareto-improvement if punishments for cheating are sufficiently large.

Date: 2008
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European Journal of Political Economy is currently edited by J. De Haan, A. L. Hillman and H. W. Ursprung

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