Investigating the Effects of Network Structures in Massive Agent‐Based Models of Tax Evasion

Koehler, Matthew T. K.; Michel, Shaun; Slater, David; Harvey, Christine; Andrei, Amanda; Comer, Kevin T.

doi:10.1002/9781119155713.ch8

Cited by 2 publications

(1 citation statement)

References 25 publications

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“…With the improve of computing features and algorithms, agent-based models [7][8][9][10][11] become an effective tool for describing the tax evasion of a society, including social parameters that take into account the possible scenarios in which a group of agents susceptible to declare taxes are involved.…”

Section: Introductionmentioning

confidence: 99%

Tax evasion study in a society realized as a diluted Ising model with competing interactions

Giraldo-Barreto,

Restrepo

2021

Preprint

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In this research, the tax evasion percentage, as order parameter, of a system of individuals or agents inscribed in a N = L × L 2D square grid is computed. The influence of local environment over each agent is quantified both through competitive exchange integrals (ferromagnetic and antiferromagnetic bonds) and dangling bonds randomly distributed, which allows to identify the system with disordered ternary alloys of the type ApBxCq with a certain stoichiometry (p, x, q) particular of each society. Our proposal is based on the so-called spin glass phase present in magnetic systems characterized by disorder, dilution and competitive interactions where magnetic frustration can take place, resembling the way as an individual or agent in a society is able to face a decision. In this sense, agents are identified as Ising spins, which can take two possible values (σ = ±1), in correspondence with a two-state system where agents can be tax compliant or not. Such an identification between social and physical variables, as well as parameters like an external applied magnetic field or temperature, are topic of discussion in this investigation. Thermalization of the observables is carried out by means of the heat bath algorithm. Other social variables, such as the audit period, and its effects over the percentage of evasion, are used to analyze the behavior of tax evasion in Colombia, however the model can be applied to any country.

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Section: Introductionmentioning

confidence: 99%

Tax evasion study in a society realized as a diluted Ising model with competing interactions

Giraldo-Barreto,

Restrepo

2021

Preprint

View full text Add to dashboard Cite

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Dynamic behavioural changes in an agent-based econophysics tax compliance model: bomb crater versus target effects and efficient audit strategies

Berger

Hokamp

Seibold

2021

Journal of Public Finance and Public Choice

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We investigate a heterogeneous Ising model in the context of tax evasion dynamics, where different types of agents are parameterised via local temperatures and magnetic fields. Our work focuses on the dynamic behavioural change of agents after an audit, which either corresponds to a temporal reduction or enhancement of compliance, also known under the terms of ‘bomb crater effect’ and ‘target effect’, respectively. We analyse this effect for different types of agents: endogenously non-compliant types; agents that have a tendency to copy (non-)compliant behaviour from their social environment; ethical agents with strong endogenous moral attitudes; and random types that show large fluctuations between compliant and non-compliant behaviour. Each type influences overall tax evasion differently and our model predicts that, interestingly, increasing the audit probability can have the counter-intuitive effect of increasing tax evasion under certain circumstances. We analyse audit strategies that can suppress this effect, and thus contribute to the burgeoning literature on the actual impact of tax audits.

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Investigating the Effects of Network Structures in Massive Agent‐Based Models of Tax Evasion

Cited by 2 publications

References 25 publications

Tax evasion study in a society realized as a diluted Ising model with competing interactions

Tax evasion study in a society realized as a diluted Ising model with competing interactions

Dynamic behavioural changes in an agent-based econophysics tax compliance model: bomb crater versus target effects and efficient audit strategies

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