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Myths and Numbers on Whistleblower Rewards

Author

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  • Nyreröd, Theo

    () (Independent)

  • Spagnolo, Giancarlo

    () (Stockholm Institute of Transition Economics)

Abstract

Whistleblower rewards have been used extensively in the US to limit procurement fraud and tax evasion, and their use has been extended to fight financial fraud after the recent financial crisis. In Europe there is currently a debate on their possible introduction, but authorities appear considerably less enthusiastic than their US counterparts. While it is important that these tools are scrutinized by a lively democratic debate, many things have been written, even by important institutional players, that have no empirical backing or that are in open contrast with the available evidence from independent research. In this paper we review some of the most debated issues regarding the potential benefits and costs of financial incentives whistleblowers trying to separate existing empirical evidence from conjectures with no empirical support, and myths in obvious contrast with available evidence.

Suggested Citation

  • Nyreröd, Theo & Spagnolo, Giancarlo, 2017. "Myths and Numbers on Whistleblower Rewards," SITE Working Paper Series 44, Stockholm School of Economics, Stockholm Institute of Transition Economics, revised 27 Apr 2018.
    • Handle: RePEc:hhs:hasite:0044
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    References listed on IDEAS

    as
    1. Stikeleather, Bryan R., 2016. "When do employers benefit from offering workers a financial reward for reporting internal misconduct?," Accounting, Organizations and Society, Elsevier, vol. 52(C), pages 1-14.
    2. Abbink, Klaus & Wu, Kevin, 2017. "Reward self-reporting to deter corruption: An experiment on mitigating collusive bribery," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 256-272.
    3. Jeffrey V. Butler & Danila Serra & Giancarlo Spagnolo, 2017. "Motivating Whistleblowers," Departmental Working Papers 1701, Southern Methodist University, Department of Economics.
    4. Perrotta Berlin, Maria & Spagnolo, Giancarlo & Qin, Bei, 2015. "Leniency, Asymmetric Punishment and Corruption: Evidence from China," SITE Working Paper Series 34, Stockholm School of Economics, Stockholm Institute of Transition Economics, revised 25 May 2017.
    5. Paolo Buccirossi & Giovanni Immordino & Giancarlo Spagnolo, 2017. "Whistleblower Rewards, False Reports, and Corporate Fraud," CSEF Working Papers 477, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 02 Sep 2017.
    6. Call, Andrew C. & Kedia, Simi & Rajgopal, Shivaram, 2016. "Rank and file employees and the discovery of misreporting: The role of stock options," Journal of Accounting and Economics, Elsevier, vol. 62(2), pages 277-300.
    7. Maria Bigoni & Sven-Olof Fridolfsson & Chloé Le Coq & Giancarlo Spagnolo, 2012. "fines, leniency, and rewards in antitrust," RAND Journal of Economics, RAND Corporation, vol. 43(2), pages 368-390, June.
    8. Spagnolo, Giancarlo, 2004. "Divide et Impera: Optimal Leniency Programmes," CEPR Discussion Papers 4840, C.E.P.R. Discussion Papers.
    9. Yehonatan Givati, 2016. "A Theory of Whistleblower Rewards," The Journal of Legal Studies, University of Chicago Press, vol. 45(1), pages 43-72.
    10. Nathan H. Miller, 2009. "Strategic Leniency and Cartel Enforcement," American Economic Review, American Economic Association, vol. 99(3), pages 750-768, June.
    11. repec:wly:coacre:v:34:y:2017:i:3:p:1305-1339 is not listed on IDEAS
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    More about this item

    Keywords

    whistleblowers; rewards; economic crime; tax evasion; corruption;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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