Cheating, Emotions, and Rationality: An Experiment on Tax Evasion

Giorgio Coricelli (), Mateus Joffily (), Claude Montmarquette and Marie Claire Villeval
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Mateus Joffily: ISC - Institut des Sciences Cognitives - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - CNRS - Centre National de la Recherche Scientifique

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Abstract: The economics-of-crime approach usually ignores the emotional cost and benefit of cheating. In this paper, we investigate the relationships between emotions, deception, and rational decision-making by means of an experiment on tax evasion. Emotions are measured by skin conductance responses and self-reports. We show that the intensity of anticipated and anticipatory emotions before reporting positively correlates with both the decision to cheat and the proportion of evaded income. The experienced emotional arousal after an audit increases with the monetary sanctions and the arousal is even stronger when the evader's picture is publicly displayed. We also find that the risk of a public exposure of deception deters evasion whereas the amount of fines encourages evasion. These results suggest that an audit policy that strengthens the emotional dimension of cheating favors compliance.

Keywords: deception; tax evasion; emotions; physiological measures; experiment (search for similar items in EconPapers)
Date: 2010
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00462067v1
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Published in Experimental Economics, 2010, 13 (2), pp.226-247. ⟨10.1007/s10683-010-9237-5⟩

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Journal Article: Cheating, emotions, and rationality: an experiment on tax evasion (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00462067

DOI: 10.1007/s10683-010-9237-5

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