Whistleblowing: incentives and situational determinants

Klaus Ulrich Schmolke () and Verena Utikal ()
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Klaus Ulrich Schmolke: Johannes Gutenberg University Mainz
Verena Utikal: Private University Schloss Seeburg

Journal of Business Economics, 2025, vol. 95, issue 5, No 4, 725-748

Abstract: Abstract Law makers increasingly try to capitalize on individuals having acquired knowledge of corporate crimes or other misconduct by inducing them to blow the whistle. In a laboratory experiment we measure the effectiveness of incentives on the willingness to report such misconduct to a sanctioning authority. We find that fines for non-reporting insiders, rewards, and even simple commands, increase the probability of whistleblowing. We find the strongest effect for fines. Situational determinants also influence the willingness to blow the whistle: Insiders who are negatively affected by the misconduct are more likely to blow the whistle than non-affected or profiting insiders. Those (negatively affected) victims are also sensitive to the misconduct’s impact on the authority sanctioning the misconduct (public authority or employer): Whistleblowing is more likely if the enforcement authority is negatively affected compared to positively or not affected.

Keywords: Whistleblowing; Incentives; Situational determinants; Experiment (search for similar items in EconPapers)
JEL-codes: C91 D82 K42 M59 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11573-025-01223-0

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