Learning (not) to evade taxes

DOI10.3390/G10040038MaRDI QIDQ2307367zbMATH OpenOpenAlexFDO

Authors Aloys L. Prinz

Publication date 27 March 2020

Published in Games (Search for Journal in Brave)

Copyright license Creative Commons Attribution 4.0 International

Full work available at URL https://doi.org/10.3390/g10040038

zbMATH Keywords

all-or-nothing decision makingdeterministic and stochastic learningdiscrete decision makingexperimentstax compliance

Mathematics Subject Classification ID

Rationality and learning in game theory (91A26) Experimental studies (91A90) Decision theory (91B06)

Review text

Summary: In this paper, lab experiments on tax compliance were theoretically investigated with dynamic and stochastic methods. It is well known from experimental games that learning allows a better understanding of participants' behavior. However, it has not been explicitly applied so far in the theoretical analysis of tax compliance experiments. In this paper, it was shown that two decision-making processes may be distinguished: a discrete process in which all options are regarded and an all-or-nothing process in which either the respective tax is paid fully or not at all. The corresponding variant of the learning model was either a stochastic or a deterministic one, with the stochastic version as the more general model. In the additional empirical part of the paper, it was shown that tax payments decline in trend over the rounds of the considered experiment. This negative trend was interpreted as a learning effect, in accordance with the stochastic version of the theoretical model. However, the alternative interpretation that the observed behavior was driven by a tiring effect cannot be completely excluded.

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Cites work

• Experimenter demand effects in economic experiments
• scientific article; zbMATH DE number 44217 (Why is no real title available?)
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• Learning through reinforcement and replicator dynamics
• Reexamination of the perfectness concept for equilibrium points in extensive games
• Stochastic game theory: For playing games, not just for doing theory
• What does ``clean really mean? The implicit framing of decontextualized experiments

Cited in

(5)

• Learning Ricardian equivalence
• TAX EVASION AND STATE PRODUCTIVITY-AN EXPERIMENTAL STUDY
• The difficulty of beating the Taxman
• Tax compliance and obedience to authority at home and in the lab: A new experimental approach
• Cheating, emotions, and rationality: an experiment on tax evasion

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