On Cheating and Whistle-Blowing
Aleksander Berentsen (),
Esther Brï¿½gger and
Authors registered in the RePEc Author Service: Esther Bruegger
No 153, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich
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 agentsï¿½ 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. This extended game has a unique perfect Bayesian equilibrium in which only a cheating loser accuses the winner of cheating and the controller tests the winner if and only if the winner is accused of cheating. Whistleblowing 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 suffciently large.
Keywords: Whistleblowing; leniency; inspection games; signalling (search for similar items in EconPapers)
JEL-codes: C72 D82 K21 K42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed
Downloads: (external link)
Working Paper: On Cheating and Whistle-Blowing (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:zur:iewwpx:153
Access Statistics for this paper
More papers in IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich
Bibliographic data for series maintained by Severin Oswald ().