Abstract: Internal employee plays an increasing role in the recent practice of product quality regulation, such as carcinogenic Three Squirrels, inferior masks and kit during the period of COVID-19, Changsheng Vaccine incident, et al. Existing researches focused on the product quality supervision system comprised of government regulation, enterprise self-discipline and media supervision, which ignore the role of internal employee. Based on previous studies, a new regulation subject, internal employee or whistle-blower, is introduced. Then the evolutionary game model comprised of employee, government, enterprise, media and the public is constructed to analyze the effect of employee whistle-blowing on product quality regulation. The results show that employee participation is a beneficial supplement to external quality regulation subjects dominated by the government, which alleviates the low efficiency of government regulation caused by information asymmetry and limited regulation resources. Whistle-blower protection and reward system are the main factors jointly affecting employee’s strategy selection. Whether an employee’s whistle-blowing can play a supervisory role over enterprises and governments is not only influenced by government accountability and enterprise punishment, but also by whether report information is concerned by the media and the public. Finally, this paper analyzes the important influence of whistle-blower on the strategy selection of enterprises and government through combining the case of the Changsheng Vaccine incident. This research studied the interactive mechanism among potential whistle-blower, media, government, enterprise and the public under the scenario of product quality regulation, which enriched the study of internal employee in product regulation. Besides, this research can be further extended to other areas, such as financial regulation, et al.

Key words: product quality regulation, internal employee, whistle-blowing, four-party evolutionary game