Whistle-blowing in enforcement of environmental regulations

A mathematical model is used to assess the effectiveness of the reporting system commonly referred to as whistle-blowing used in the enforcement of environmental laws and regulations. To model realistically environmental enforcement problems such as compliance to water and air quality standards, the formal model is constructed using noncooperative game theory. To demonstrate the benefits to an environmental agency that uses a reporting system with essentially free reporting information, a model with a reporting system is rigorously compared to one without. By calculating and comparing Nash equilibria over a range of values of model parameters, the conditions under which whistle-blowing can be truly effective are identified. Overall, it is found that whistle-blowing can be helpful for reducing violations of environmental standards, thereby maintaining or improving environmental quality