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On cheating, doping and whistleblowing

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Author Info

  • Berentsen, Aleksander
  • Bruegger, Esther
  • Loertscher, Simon

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.

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Bibliographic Info

Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 24 (2008)
Issue (Month): 2 (June)
Pages: 415-436

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Handle: RePEc:eee:poleco:v:24:y:2008:i:2:p:415-436

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Web page: http://www.elsevier.com/locate/inca/505544

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References

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  1. Robert Innes, 1999. "Self-Policing and Optimal Law Enforcement When Violator Remediation is Valuable," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1305-1325, December.
  2. Sherwin Rosen, 1985. "Prizes and Incentives in Elimination Tournaments," NBER Working Papers 1668, National Bureau of Economic Research, Inc.
  3. Louis Kaplow & Steven Shavell, 1994. "Optimal Law Enforcement with Self-Reporting of Behavior," NBER Working Papers 3822, National Bureau of Economic Research, Inc.
  4. Motta, M. & Polo, M., 1999. "Leniency Programs and Cartel Prosecution," Economics Working Papers eco99/23, European University Institute.
  5. Rey, Patrick, 2002. "Towards a Theory of Competition Policy," IDEI Working Papers 121, Institut d'Économie Industrielle (IDEI), Toulouse.
  6. Buccirossi, Paolo & Spagnolo, Giancarlo, 2005. "Leniency Policies and Illegal Transactions," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 74, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  7. José Apesteguia & Martin Dufwenberg & Reinhard Selten, 2003. "Blowing the Whistle," Bonn Econ Discussion Papers bgse9_2003, University of Bonn, Germany.
  8. Jean-Pierre Benoit & Juan Dubra, 2004. "Why Do Good Cops Defend Bad Cops?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(3), pages 787-809, 08.
  9. Berentsen, Aleksander, 2002. "The economics of doping," European Journal of Political Economy, Elsevier, vol. 18(1), pages 109-127, March.
  10. Snyder, James M, 1989. "Election Goals and the Allocation of Campaign Resources," Econometrica, Econometric Society, vol. 57(3), pages 637-60, May.
  11. Greenberg, Joseph, 1984. "Avoiding tax avoidance: A (repeated) game-theoretic approach," Journal of Economic Theory, Elsevier, vol. 32(1), pages 1-13, February.
  12. Innes, Robert, 1999. "Remediation and self-reporting in optimal law enforcement," Journal of Public Economics, Elsevier, vol. 72(3), pages 379-393, June.
  13. Avenhaus, Rudolf & Von Stengel, Bernhard & Zamir, Shmuel, 2002. "Inspection games," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 3, chapter 51, pages 1947-1987 Elsevier.
  14. Malik Arun S., 1993. "Self-Reporting and the Design of Policies for Regulating Stochastic Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 24(3), pages 241-257, May.
  15. Konrad, Kai A., 2005. "Tournaments and Multiple Productive Inputs: The Case of Performance Enhancing Drugs," IZA Discussion Papers 1844, Institute for the Study of Labor (IZA).
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Citations

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Cited by:
  1. Buechel, Berno & Emrich, Eike & Pohlkamp, Stefanie, 2013. "Nobody's innocent: the role of customers in the doping dilemma," MPRA Paper 44627, University Library of Munich, Germany.
  2. Arce, Daniel G., 2010. "Corporate virtue: Treatment of whistle blowers and the punishment of violators," European Journal of Political Economy, Elsevier, vol. 26(3), pages 363-371, September.
  3. Nicolas Eber, 2011. "Fair play in contests," Journal of Economics, Springer, vol. 103(3), pages 253-270, July.
  4. Daniel Mueller, 2013. "The Doping Threshold in Sport Contests," Working papers 2013/05, Faculty of Business and Economics - University of Basel.
  5. Ryvkin, Dmitry, 2010. "Contests with private costs: Beyond two players," European Journal of Political Economy, Elsevier, vol. 26(4), pages 558-567, December.
  6. Heller, William B. & Sieberg, Katri K., 2010. "Honor among thieves: Cooperation as a strategic response to functional unpleasantness," European Journal of Political Economy, Elsevier, vol. 26(3), pages 351-362, September.

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