EconPapers    
Economics at your fingertips  
 

What distinguishes people who turn into tax evaders when properly incentivized from those who don’t? An experimental study using hypothetical scenarios

Tei Laine, Tomi Silander and Kayo Sakamoto

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2020, vol. 85, issue C

Abstract: We were interested in the factors that influence deceptive behavior, especially if strong incentives can make people overcome their aversion to lying. We ran an online experiment in which participants made choices between deceptive and non-deceptive actions in hypothetical scenarios of reporting their income to tax authorities. The participants could lie in their tax report in order to receive a larger tax refund or to pay less additional taxes. In some scenarios they could face a tax penalty if their report was found to be in error. While a large number of participants never deceived when it was risky and potentially costly, the rate of deception almost doubled in conditions with no detection risk or penalty. However, not all participants responded equally to the absence of risk and detection penalty (incentives). We were able to identify three types of behaviors that were related to participants’ general risk and lie attitudes, but not to their numeracy skills or risk literacy. These three types of participants also differed in their deception rate and sensitivity to changes in incentives in different conditions varying either risk of getting caught or expected advantage gained by deceiving.

Keywords: Deception; Risk taking; Tax evasion; Risk attitude; Lie attitude (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S221480431830510X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:85:y:2020:i:c:s221480431830510x

DOI: 10.1016/j.socec.2020.101511

Access Statistics for this article

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) is currently edited by Ofer Azar

More articles in Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-07-01
Handle: RePEc:eee:soceco:v:85:y:2020:i:c:s221480431830510x