Whistleblowing vs. Random Audit: An Experimental Test of Relative Efficiency

SUMMARY This paper reports an experimental test of the relative efficiency of a whistleblowing‐based audit scheme compared to a random‐based audit scheme. We design a between‐subjects laboratory experiment with two treatments: a benchmark with a random‐based audit scheme and an alternative treatment in which taxpayers can blow the whistle. Compared to the benchmark, the whistleblowing‐based audit scheme (i) improves the targeting of evaders,...