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Motivating Whistleblowers

Author

Listed:
  • Jeffrey V. Butler

    (Louisiana State University)

  • Danila Serra

    (Southern Methodist University)

  • Giancarlo Spagnolo

    (SITE, Stockholm School of Economics, EIEF, and CEPR)

Abstract

We experimentally investigate employees’ decisions to blow the whistle on a manager whose law-breaking benefits the firm but harms society. We investigate the effects of both financial rewards and non-monetary incentives, in the form of public scrutiny, on whistleblowing as well as their interaction with the visibility of harm, i.e., whether the harm to society stemming from the manager’s malfeasance is known to the general public. Our results suggest that: i) financial rewards substantially increase the likelihood of whistleblowing; ii) public scrutiny and social judgment increase (decrease) whistleblowing when the negative externalities generated by fraud are visible (invisible) to the public. Ancillary results suggest an intriguing relationship between political orientation and responsiveness to public scrutiny.

Suggested Citation

  • Jeffrey V. Butler & Danila Serra & Giancarlo Spagnolo, 2017. "Motivating Whistleblowers," Departmental Working Papers 1701, Southern Methodist University, Department of Economics.
  • Handle: RePEc:smu:ecowpa:1701
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    Cited by:

    1. 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.
    2. Hennequin, Emilie, 2020. "What motivates internal whistleblowing? A typology adapted to the French context," European Management Journal, Elsevier, vol. 38(5), pages 804-813.
    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. Masclet, David & Montmarquette, Claude & Viennot-Briot, Nathalie, 2019. "Can whistleblower programs reduce tax evasion? Experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 83(C).
    5. Attar, Andrea & Campioni, Eloisa & Piaser, Gwenaël, 2019. "Private communication in competing mechanism games," Journal of Economic Theory, Elsevier, vol. 183(C), pages 258-283.
    6. Tommaso Proietti & Niels Haldrup & Oskar Knapik, 2017. "Spikes and memory in (Nord Pool) electricity price spot prices," CEIS Research Paper 422, Tor Vergata University, CEIS, revised 18 Dec 2017.
    7. Theo Nyreröd & Giancarlo Spagnolo, 2021. "Myths and numbers on whistleblower rewards," Regulation & Governance, John Wiley & Sons, vol. 15(1), pages 82-97, January.
    8. 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.
    9. 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.
    10. Daniela Di Cagno & Werner Güth & Tim Lohse & Francesca Marazzi & Lorenzo Spadoni, 2022. "Who cares when Value (Mis)reporting May Be Found Out? An Acquiring-a-Company Experiment with Value Messages and Information Leaks," CEIS Research Paper 531, Tor Vergata University, CEIS, revised 31 Jan 2022.
    11. Abbink, Klaus & Ryvkin, Dmitry & Serra, Danila, 2020. "Corrupt police," Games and Economic Behavior, Elsevier, vol. 123(C), pages 101-119.
      • Klaus Abbink & Dmitry Ryvkin & Danila Serra, 2018. "Corrupt police," Working Papers wp2018_09_01, Department of Economics, Florida State University, revised Sep 2018.
    12. Maria Vittoria Levati & Chiara Nardi, 2019. "The power of words in a petty corruption experiment," Working Papers 18/2019, University of Verona, Department of Economics.
    13. Guerra, Alice & Zhuravleva, Tatyana, 2021. "Do bystanders react to bribery?," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 442-462.
    14. Antinyan, Armenak & Corazzini, Luca & Pavesi, Filippo, 2020. "Does trust in the government matter for whistleblowing on tax evaders? Survey and experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 77-95.
    15. Armenak Antinyan & Luca Corazzini & Filippo Pavesi, 2018. "What Matters for Whistleblowing on Tax Evaders? Survey and Experimental Evidence," Working Papers 07/2018, University of Verona, Department of Economics.
    16. Jun Hu, 2021. "Asymmetric punishment, Leniency and Harassment Bribes in China: a selective survey," Working Papers hal-03119491, HAL.
    17. Ni Made Mega Abdi Utami & Gugus Irianto & Yeney Widya Prihatiningtias, 2020. "Analyzing the effect of financial reward, personal cost and reporting channel on whistleblowing intentions utilizing an experimental study," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 9(2), pages 125-132, March.

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    More about this item

    Keywords

    Whistleblowing; fraud; financial rewards; public scrutiny.;
    All these keywords.

    JEL classification:

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

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