Learning in experiments

dynamic interaction of policy variables designed to deter tax evasion

Amal Soliman, Philip Jones, John Cullis

Research output: Contribution to journalArticle

5 Citations (Scopus)
19 Downloads (Pure)

Abstract

While neoclassical economic theory sheds insight into the way that audit rates and penalty rates interact when individuals decide to declare income for taxation, it predicts far lower levels of compliance than observed levels of compliance. This paper analyses experimental responses to explore a dynamic interaction between audit and penalty rates as individuals learn how to comply with taxation. It compares the responses of subjects in experiments with responses that are predicted when individuals rely on an adaptive learning process (that offers information feedback about decision payoffs). This comparison suggests that learning is an important consideration when explaining differences between predicted and observed levels of tax compliance.
Original languageEnglish
Pages (from-to)175-186
JournalJournal of Economic Psychology
Volume40
Early online date17 Jun 2013
DOIs
Publication statusPublished - Feb 2014

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tax evasion
Taxes
Learning
taxation
audit
penalty
experiment
interaction
Compliance
learning
neoclassical theory
Economics
economic theory
taxes
learning process
income
Interaction
Experiment
Tax evasion
Taxation

Cite this

Learning in experiments : dynamic interaction of policy variables designed to deter tax evasion. / Soliman, Amal ; Jones, Philip; Cullis, John.

In: Journal of Economic Psychology, Vol. 40, 02.2014, p. 175-186.

Research output: Contribution to journalArticle

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