Aniko Oery (Carnegie Mellon University) Microeconomic Theory Workshop

Title: Whistleblowing (joint with Ayca Kaya and Anne-Katrin Roesler)

Abstract: We study a dynamic game of whistleblowing among agents who independently receive evidence over time. Evidence arrives privately, and once an agent is informed, she may choose at any moment to disclose it (i.e., whistleblow) or to delay reporting. Reporting entails a cost (e.g., risk of retaliation) but yields a benefit if corroborated by another report. Agents prefer to corroborate existing reports rather than be the first to disclose. If no other agent holds evidence at the time of report, the payoff from reporting is negative. As a result, agents delay in hopes of free-riding on others’ disclosures and waiting for additional evidence to surface. We show that all equilibria feature an initial silent phase during which agents wait for others to become informed, followed by a reporting phase. The equilibrium outcome in the reporting phase is not unique. Depending on the incentive structure, an equilibrium in which only one agent reports with certainty or an equilibrium in which agents report gradually minimizes delay. We examine how differences in disclosure incentives—potentially asymmetric across agents—affect the timing of reports in those equilibria. Our results provide insights into which organizational structures may facilitate whistleblowing.