“…As in Karakostas and Zizzo () and Silverman, Slemrod, and Uler (), we expect that explaining the usefulness of obeying the nudge should, if anything, further increase compliance with the requested production level. Hypothesis 4: In the PA and PAL treatments, quantities produced are higher than in the A treatment but lower than the Nash prediction, both in two‐firms and four‐firms markets.…”
Section: Experimental Design and Hypothesesmentioning
confidence: 59%
“…While Huck, Müller, and Normann () explicitly assigned subjects to the roles of both owners and managers (two each), we exogenously provide the owners’ request and let all subjects play the role of managers only. Our implementation of delegation in the laboratory is stylized and exploits the fact that the experimenter can be seen as an authority toward the experimental subjects (Zizzo ; Karakostas and Zizzo ; Silverman, Slemrod, and Uler ; Kimbrough and Vostroknutov ). We do not manipulate the nature of the authority in our experiment but this has been looked at by Silverman, Slemrod, and Uler () in their public good contribution setting, and could clearly be looked at in future research of ours.…”
Section: Discussionmentioning
confidence: 99%
“… Ours is a deliberate use of experimenter demand as the direct object of investigation rather than a confound relative to other experimental objectives: see Zizzo () for a methodological discussion of experimenter demand effects and Cadsby, Maynes, and Trivedi (), Karakostas and Zizzo (), and Silverman, Slemrod, and Uler () for other applications of using the experimenter as authority in the context of a tax compliance, a money burning, and a public good contribution experiment, respectively. We discuss Silverman, Slemrod, and Uler () more below.…”
A 'collusion puzzle' exists by which, even though increasing the number of firms reduces the ability to tacitly collude, and leads to a collapse in collusion in experimental markets with three or more firms, in natural markets there are such numbers of firms colluding successfully.We present an experiment showing that, if managers are deferential towards an authority, firms can induce more collusion by delegating production decisions to middle managers and providing suitable informal nudges. This holds not only with two but also with four firms.We are also able to distinguish compliance effects from coordination effects.
“…As in Karakostas and Zizzo () and Silverman, Slemrod, and Uler (), we expect that explaining the usefulness of obeying the nudge should, if anything, further increase compliance with the requested production level. Hypothesis 4: In the PA and PAL treatments, quantities produced are higher than in the A treatment but lower than the Nash prediction, both in two‐firms and four‐firms markets.…”
Section: Experimental Design and Hypothesesmentioning
confidence: 59%
“…While Huck, Müller, and Normann () explicitly assigned subjects to the roles of both owners and managers (two each), we exogenously provide the owners’ request and let all subjects play the role of managers only. Our implementation of delegation in the laboratory is stylized and exploits the fact that the experimenter can be seen as an authority toward the experimental subjects (Zizzo ; Karakostas and Zizzo ; Silverman, Slemrod, and Uler ; Kimbrough and Vostroknutov ). We do not manipulate the nature of the authority in our experiment but this has been looked at by Silverman, Slemrod, and Uler () in their public good contribution setting, and could clearly be looked at in future research of ours.…”
Section: Discussionmentioning
confidence: 99%
“… Ours is a deliberate use of experimenter demand as the direct object of investigation rather than a confound relative to other experimental objectives: see Zizzo () for a methodological discussion of experimenter demand effects and Cadsby, Maynes, and Trivedi (), Karakostas and Zizzo (), and Silverman, Slemrod, and Uler () for other applications of using the experimenter as authority in the context of a tax compliance, a money burning, and a public good contribution experiment, respectively. We discuss Silverman, Slemrod, and Uler () more below.…”
A 'collusion puzzle' exists by which, even though increasing the number of firms reduces the ability to tacitly collude, and leads to a collapse in collusion in experimental markets with three or more firms, in natural markets there are such numbers of firms colluding successfully.We present an experiment showing that, if managers are deferential towards an authority, firms can induce more collusion by delegating production decisions to middle managers and providing suitable informal nudges. This holds not only with two but also with four firms.We are also able to distinguish compliance effects from coordination effects.
“…One reason is that rewards may trigger an experimenter demand effect. Our participants could interpret the existence of rewards as an indication of desired behavior and comply because they simply want to conform with the desired behavior (see Zizzo, 2010, andKarakostas andZizzo, 2014, for analysis of demand effects in the 2 We specifically mean fines that are redistributed to taxpayers without discriminating between non-audited taxpayers and taxpayers found compliant. Some of the studies incorporate a public good element, which may be partially funded by fines.…”
Section: Introductionmentioning
confidence: 99%
“…When in addition f = 0 the decision problem is essentially an individual decision problem in which a player's action has no effect on others and there are no incentives at all to comply. The degree to which subjects comply in this case can be seen as a control for any inbuilt bias for compliance due, for example, to confusion (Andreoni, 1995;Houser and Kurzban, 2002) or a pure social norm to comply (Karakostas and Zizzo, 2014). We also used parameterizations where taxes generate social benefits (y = 2) and varying positive fines (f = 3, 6).…”
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. We compare in a laboratory experiment two audit-based tax compliance mechanisms that collect fines from those found non-compliant. The mechanisms differ in the way fines are redistributed to individuals who were either not audited or audited and found to be compliant.
Terms of use:
Documents inThe first, as is the case in most extant tax systems, does not discriminate between the unaudited and those found compliant. The second targets the redistribution in favor of those found compliant. We find that targeting increases compliance when paying taxes generates a social return. We do not find any increase in compliance in a control treatment where individuals audited and found compliant receive symbolic rewards. It is not the mere assigning of rewards, but the material incentives inherent in the rewards that improve compliance. We conclude that existing tax mechanisms have room for improvement by rewarding financially those audited and found compliant.
We analyze experimentally the eects of external interventions such as subsidy and targeting on investment decisions, during an intervention and after. We employ a multi-period version of the trust (investment) game Berg et al. (1995) introducing either monetary incentives for contribution or providing a suggestion about the level of investment. The results of the experiment indicate that targeting is an effective instrument to promote trustful behavior while subsidy policy is eective in neither the short-or the long-run.Therefore, we suggest a targeting policy should be considered as an instrument to foster trustful behavior.
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