Commitment to tax compliance: Timing effect on willingness to evade

Luigi Mittone and Viola Saredi

Journal of Economic Psychology, 2016, vol. 53, issue C, 99-117

Abstract: Experimental and empirical literature on individual decision-making has shown a remarkable difference between planning and ongoing decisions: when asked to plan their actions, people overweight events with low probability; on the contrary, in ongoing decisions, they tend to ignore them. We report on a laboratory experiment designed to explore the presence of this decisional inconsistency in taxpayers’ behavior, by means of a commitment system for compliance. In line with the overweighting of events with small probabilities (i.e. fiscal audits), we find that planning induces the majority of people not only to adopt a mechanism of commitment to tax compliance, but also to actually comply.

Keywords: Tax-evasion; Planning-Ongoing Gap; Risk preferences (search for similar items in EconPapers)
JEL-codes: C91 D81 H20 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:53:y:2016:i:c:p:99-117

DOI: 10.1016/j.joep.2016.01.001

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