IDEAS home Printed from https://ideas.repec.org/p/hhs/hasite/0044.html
   My bibliography  Save this paper

Myths and Numbers on Whistleblower Rewards

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://swopec.hhs.se/hasite/papers/hasite0044.2.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Other versions of this item:

    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. Niels Johannesen & Tim B.M. Stolper, 2021. "The Deterrence Effect of Whistleblowing," Journal of Law and Economics, University of Chicago Press, vol. 64(4), pages 821-855.
    5. 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.
    6. Paolo Buccirossi & Giovanni Immordino & Giancarlo Spagnolo, 2021. "Whistleblower rewards, false reports, and corporate fraud," European Journal of Law and Economics, Springer, vol. 51(3), pages 411-431, June.
    7. 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.
    8. 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.
    9. Niels Johannesen & Tim Stolper, 2017. "The Deterrence Effect of Whistleblowing: An Event Study of Leaked Customer Information from Banks in Tax Havens," CESifo Working Paper Series 6784, CESifo.
    10. Thomas Carson & Mary Verdu & Richard Wokutch, 2008. "Whistle-Blowing for Profit: An Ethical Analysis of the Federal False Claims Act," Journal of Business Ethics, Springer, vol. 77(3), pages 361-376, February.
    11. Spagnolo, Giancarlo, 2004. "Divide et Impera: Optimal Leniency Programmes," CEPR Discussion Papers 4840, C.E.P.R. Discussion Papers.
    12. Yehonatan Givati, 2016. "A Theory of Whistleblower Rewards," The Journal of Legal Studies, University of Chicago Press, vol. 45(1), pages 43-72.
    13. Andreas Stephan, 2014. "Is the Korean Innovation of Individual Informant Rewards a Viable Cartel Detection Tool?," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2014-03, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    14. Nathan H. Miller, 2009. "Strategic Leniency and Cartel Enforcement," American Economic Review, American Economic Association, vol. 99(3), pages 750-768, June.
    15. Vishal P. Baloria & Carol A. Marquardt & Christine I. Wiedman, 2017. "A Lobbying Approach to Evaluating the Whistleblower Provisions of the Dodd†Frank Reform Act of 2010," Contemporary Accounting Research, John Wiley & Sons, vol. 34(3), pages 1305-1339, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jeffrey V. Butler & Danila Serra & Giancarlo Spagnolo, 2020. "Motivating Whistleblowers," Management Science, INFORMS, vol. 66(2), pages 605-621, February.
    2. Colignatus, Thomas, 2020. "Forum Theory & A National Assembly of Science and Learning," MPRA Paper 98568, University Library of Munich, Germany, revised 09 Feb 2020.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Theo Nyreröd & Giancarlo Spagnolo, 2021. "Myths and numbers on whistleblower rewards," Regulation & Governance, John Wiley & Sons, vol. 15(1), pages 82-97, January.
    2. Spagnolo, Giancarlo & Nyreröd, Theo, 2019. "Financial Incentives for Whistleblowers: A Short Survey," SITE Working Paper Series 50, Stockholm School of Economics, Stockholm Institute of Transition Economics.
    3. Paolo Buccirossi & Giovanni Immordino & Giancarlo Spagnolo, 2021. "Whistleblower rewards, false reports, and corporate fraud," European Journal of Law and Economics, Springer, vol. 51(3), pages 411-431, June.
    4. Jun Hu, 2021. "Asymmetric punishment, Leniency and Harassment Bribes in China: a selective survey," Working Papers hal-03119491, HAL.
    5. 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.
    6. Buckenmaier, Johannes & Dimant, Eugen & Mittone, Luigi, 2020. "Effects of institutional history and leniency on collusive corruption and tax evasion," Journal of Economic Behavior & Organization, Elsevier, vol. 175(C), pages 296-313.
    7. Peter T. Dijkstra & Jonathan Frisch, 2018. "Sanctions and Leniency to Individuals, and its Impact on Cartel Discoveries: Evidence from the Netherlands," De Economist, Springer, vol. 166(1), pages 111-134, March.
    8. Emons, Winand, 2020. "The effectiveness of leniency programs when firms choose the degree of collusion," International Journal of Industrial Organization, Elsevier, vol. 70(C).
    9. Isogai, Shigeki & Shen, Chaohai, 2023. "Multiproduct firm’s reputation and leniency program in multimarket collusion," Economic Modelling, Elsevier, vol. 125(C).
    10. Evans, J. Harry & Ma, Mark (Shuai) & Yang, Yucheng (John), 2024. "Seeking justice: Inequitable management compensation and employee whistleblowing," Accounting, Organizations and Society, Elsevier, vol. 113(C).
    11. Jochem, Annabelle & Parrotta, Pierpaolo & Valletta, Giacomo, 2020. "The impact of the 2002 reform of the EU leniency program on cartel outcomes," International Journal of Industrial Organization, Elsevier, vol. 71(C).
    12. Jeffrey V. Butler & Danila Serra & Giancarlo Spagnolo, 2017. "Motivating Whistleblowers," CEIS Research Paper 419, Tor Vergata University, CEIS, revised 12 Dec 2017.
    13. Georg Clemens & Holger A. Rau, 2019. "Do discriminatory leniency policies fight hard‐core cartels?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(2), pages 336-354, April.
    14. Maria Bigoni & Sven-Olof Fridolfsson & Chloé Le Coq & Giancarlo Spagnolo, 2015. "Trust, Leniency, and Deterrence," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 31(4), pages 663-689.
    15. Jef De Mot & Murat C. Mungan, 2024. "Whistle‐blowing and the incentive to hire," Economic Inquiry, Western Economic Association International, vol. 62(3), pages 1292-1308, July.
    16. Chen, Zhiqi & Ghosh, Subhadip & Ross, Thomas W., 2015. "Denying leniency to cartel instigators: Costs and benefits," International Journal of Industrial Organization, Elsevier, vol. 41(C), pages 19-29.
    17. Lee, Gladys & Xiao, Xinning, 2018. "Whistleblowing on accounting-related misconduct: A synthesis of the literature," Journal of Accounting Literature, Elsevier, vol. 41(C), pages 22-46.
    18. Jun Zhou, 2016. "The Rise and Fall of Cartels with Multi-market Colluders," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(4), pages 381-403, June.
    19. Andres, Maximilian & Bruttel, Lisa & Friedrichsen, Jana, 2021. "The leniency rule revisited: Experiments on cartel formation with open communication," International Journal of Industrial Organization, Elsevier, vol. 76(C).
    20. Forsbacka, Tove & Le Coq, Chloé & Marvão, Catarina, 2023. "Cartel birth and death dynamics: Empirical evidence," International Journal of Industrial Organization, Elsevier, vol. 89(C).

    More about this item

    Keywords

    whistleblowers; rewards; economic crime; tax evasion; corruption;
    All these keywords.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:hasite:0044. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dominick Nilsson (email available below). General contact details of provider: https://edirc.repec.org/data/sihhsse.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.