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Whistleblowing: incentives and situational determinants

Author

Listed:
  • Klaus Ulrich Schmolke

    (Johannes Gutenberg University Mainz)

  • Verena Utikal

    (Private University Schloss Seeburg)

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.

Suggested Citation

  • Klaus Ulrich Schmolke & Verena Utikal, 2025. "Whistleblowing: incentives and situational determinants," Journal of Business Economics, Springer, vol. 95(5), pages 725-748, July.
    • Handle: RePEc:spr:jbecon:v:95:y:2025:i:5:d:10.1007_s11573-025-01223-0
    DOI: 10.1007/s11573-025-01223-0
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    More about this item

    Keywords

    Whistleblowing; Incentives; Situational determinants; Experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • M59 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Other

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