Crime, Intimidation, and Whistleblowing: A Theory of Inference from Unverifiable Reports

Sylvain Chassang, Gerard Padró I. Miquel

    Research output: Contribution to journalArticle

    Abstract

    We consider a game between a principal, an agent, and a monitor in which the principal would like to rely on messages by the monitor (the potential whistleblower) to target intervention against a misbehaving agent. The difficulty is that the agent can credibly threaten to retaliate against the monitor in the event of an intervention. In this setting, intervention policies that are responsive to the monitor's message provide informative signals to the agent, which can be used to target threats efficiently. Principals that are too responsive to information shut down communication channels. Successful intervention policies must therefore garble the information provided by monitors and cannot be fully responsive. We show that policy evaluation on the basis of non-verifiable whistleblower messages is feasible under arbitrary incomplete information provided policy design takes into account that messages are endogenous.

    Original languageEnglish (US)
    Pages (from-to)2530-2553
    Number of pages24
    JournalReview of Economic Studies
    Volume86
    Issue number6
    DOIs
    StatePublished - Nov 1 2019

    Keywords

    • C72
    • Crime
    • D23
    • D73
    • D86
    • Inference
    • Intimidation
    • Plausible deniability
    • Policy evaluation
    • Structural experiment design
    • Whistleblowing

    ASJC Scopus subject areas

    • Economics and Econometrics

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