Compliance with Endogenous Audit Probabilities

Kai Konrad, Tim Lohse and Salmai Qari

No 1493, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This paper studies the effect of endogenous audit probabilities on reporting behavior in a face-to-face compliance situation such as at customs. In an experimental setting in which underreporting has a higher expected payoff than truthful reporting we find an increase in compliance of about 80% if subjects have reason to believe that their behavior towards an officer influences their endogenous audit probability. Higher compliance is driven by considerations about how own appearance and performance affect their audit probability, rather than by social and psychological effects of face-to-face contact.

Keywords: Compliance; audit probability; tax evasion; face value; customs (search for similar items in EconPapers)
JEL-codes: C91 H26 H31 K42 (search for similar items in EconPapers)
Pages: 26 : Anh. p.
Date: 2015
New Economics Papers: this item is included in nep-acc, nep-cbe, nep-exp, nep-iue, nep-law and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Journal Article: Compliance with Endogenous Audit Probabilities (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp1493

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