Dynamic behaviour in tax evasion: An experimental approach

Mittone, Luigi

doi:10.1016/j.socec.2005.11.065

Cited by 170 publications

(154 citation statements)

References 14 publications

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“…This finding is observed both on an aggregated level across all treatments and in each of the three treatments individually. Fourth, in line with the bomb crater effect observed by Mittone (2006), we find that individuals are less compliant with the tax law after they were audited.…”

Section: Summary and Discussionsupporting

confidence: 81%

“…The influence of the game specific and individual specific variables does not differ systematically to the effects observed in table 6. This result is in line with the "bomb crater effect" first observed by Mittone (2006) and further analyzed by, for example, Maciejovsky et al (2007) and Kastlunger et al (2009) which describes the tendency of subjects to decrease their tax compliance rates immediately after they were audited.…”

supporting

confidence: 85%

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The effects of rewards on tax compliance decisions

Fochmann

Kroll²

2016

Journal of Economic Psychology

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe analyze how the redistribution of tax revenues influences tax compliance behavior by applying different reward mechanisms. In our experiment, subjects have to make two decisions. In the first stage, subjects decide on the contribution to a public good. In the second stage, subjects declare their income from the first stage for taxation. Our main results are threefold: First, from an aggregated perspective, rewards have a negative overall effect on tax compliance. Second, we observe that rewards affect the decision of taxpayers asymmetrically. In particular, rewards have either no effect (for those who are rewarded) or a negative effect (for those who are not rewarded) on tax compliance. Thus, if a high compliance rate of taxpayers is preferred, rewards should not be used by the tax authority. Third, we find an inverse u-shaped relationship between public good contribution and tax compliance. In particular, up to a certain level, tax compliance increases with subjects' own contributions to the public good. Above this level, however, tax compliance decreases with the public good contribution.

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Section: Summary and Discussionsupporting

confidence: 81%

supporting

confidence: 85%

The effects of rewards on tax compliance decisions

Fochmann

Kroll²

2016

Journal of Economic Psychology

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“…The alternative is the bomb-crater e¤ect that is documented experimentally by Guala and Mittone (2005), Kastlunger et al (2009), Maciejovsky et al (2007, and Mittone (2006). In this process a taxpayer who has been audited in one period believes that they are less likely to be audited in the next, but the belief gradually rises over time.…”

Section: Network Modelmentioning

confidence: 99%

Predictive analytics and the targeting of audits

Hashimzade

Myles

Rablen

2016

Journal of Economic Behavior & Organization

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The literature on audit strategies has focused on random audits or on audits conditioned only on income declaration. In contrast, tax authorities employ the tools of predictive analytics to identify taxpayers for audit, with a range of variables used for conditioning. The paper explores the compliance and revenue consequences of the use of predictive analytics in an agent-based model that draws upon a behavioral approach to tax compliance. The taxpayers in the model form subjective beliefs about the probability of audit from social interaction, and are guided by a social custom that is developed from meeting other taxpayers. The belief and social custom feed into the occupational choice between employment and two forms of self-employment. It is shown that the use of predictive analytics yields a signi…cant increase in revenue over a random audit strategy.

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“…Decreasing this noise ratio has a much smaller effect than increasing severity. In a repeated game, participants react to the experience of having been punished by shifting behavior closer to the norm (Mittone 2006). …”

Section: A) Deterrencementioning

confidence: 99%