Speaker: Ashley Renee Hodgson, Associate Professor of Economics, St. Olaf College, USA
Watch the Session: https://app.knowmia.com/Vevk
Session description: Blockchain technology and a suite of related technologies may enable systems that allow the whistleblowing process to be distributed among many individuals within an organization, each with evidence of a small piece of the corruption story. An employee’s decision about whether to report potential corruption is a classic Prisoner’s Dilemma in game theory. If the employee believes that others in the company have also observed the corruption, the dominant strategy is to hope that others report while refraining from reporting to protect oneself from retribution from the organization. The result is that employees may stay quiet, even if many are aware of corruption. Many of these employees may be willing to release evidence if they believed there was a third option besides “Report” or “Stay Quiet”. In particular, a third option of “Report if and only if others also report” could change the Nash Equilibrium. Blockchain registries and smart contracts could enable such an option. Blockchain technology offers a way for employees to register artifacts as evidence of corruption, and to maintain full control over the dispersal of that evidence. If the employee wanted to register evidence that they were not yet ready to release, they could do so. A series of smart contracts could allow law firms to reach out to people who have registered artifacts while protecting the privacy of the employees who have registered evidence. Smart contracts or law firms could summarize the body of evidence accumulating on a blockchain using various techniques. There are some inherent differences in the likely evolution of anticorruption blockchains compared to cryptocurrencies. While cryptocurrencies have an advantage in adoption in places with the most unstable currencies and the most corrupt banking systems, the reverse may be true for anticorruption blockchains. Specifically, anticorruption blockchains may need to emerge first in countries with robust legal systems that could effectively prosecute based on evidence accumulating on such a blockchain. Testing early versions of anticorruption blockchains in organizations and entities with lower stakes for employees will also be important.
Bio: Ashley Hodgson is an Associate Professor of Economics and Department Chair at St. Olaf College. Her teaching includes behavioral economics, blockchain economics, health care economics, game theory, platform economics and microeconomic theory, and her research interests span these fields. She has two YouTube channels, one with economics lectures and the other looking at issues of social media, information distortion, and power concentration.