Tax Compliance and Public Goods Provision. An Agent-based Econophysics Approach

Sascha Hokamp and Götz Seibold ()
Additional contact information
Götz Seibold: BTU Cottbus

Central European Journal of Economic Modelling and Econometrics, 2014, vol. 6, issue 4, 217-236

Abstract: We calculate the dynamics of tax evasion within a multi-agent econophysics model which is adopted from the theory of magnetism and previously has been shown to capture the main characteristics from agent-based based models which build on the standard Allingham and Sandmo approach. In particular, we implement a feedback of public goods provision on the decision-making of selfish agents which aim to pursue their self interest. Our results imply that such a feedback enhances the moral attitude of selfish agents thus reducing the percentage of tax evasion. Two parameters govern the behavior of selfish agents, (i) the rate of adaption to changes in public goods provision and (ii) the threshold of perception of public goods provision. Furtheron we analyze the tax evasion dynamics for different agent compositions and under the feedback of public goods provision. We conclude that policymakers may enhance tax compliance behavior via the threshold of perception by means of targeted public relations.

Keywords: tax compliance; econophysics; multi-agent model (search for similar items in EconPapers)
JEL-codes: C15 H30 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.cejeme.eu/publishedarticles/2014-35-24-635550501521093750-4578.pdf (application/pdf)

Related works:
Working Paper: Tax Compliance and Public Goods Provision -- An Agent-based Econophysics Approach (2014)
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:psc:journl:v:6:y:2014:i:4:p:217-236

Access Statistics for this article

More articles in Central European Journal of Economic Modelling and Econometrics from Central European Journal of Economic Modelling and Econometrics
Bibliographic data for series maintained by Damian Jelito ().