It is often claimed that rewards for whistleblowers lead to fraudulent reports, but for several US programs this was not a major problem. We model the interaction between rewards for whistleblowers, sanctions against fraudulent reporting, judicial errors and standards of proof in the court case...

We study the consequences of 'leniency' - reduced legal sanctions for wrongdoers who spontaneously self-report to law enforcers - on corruption, drug dealing, and other forms of sequential, bilateral, illegal trade. We find that when not properly designed, leniency may be highly...