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Tax Evasion: Cheating Rationally or Deciding Emotionally?

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 economic models of tax compliance predict that individuals should evade taxes when the expected benefit of cheating is greater than its expected cost. When this condition is fulfilled, the high compliance however observed remains a puzzle. In this paper, we investigate the role of emotions as a possible explanation of tax compliance. Our laboratory experiment shows that emotional arousal, measured by Skin Conductance Responses, increases in the proportion of evaded taxes. The perspective of punishment after an audit, especially when the pictures of the evaders are publicly displayed, also raises emotions. We show that an audit policy that induces shame on the evaders favors compliance.

Keywords: emotions; experiment; neuro-economics; physiological measures; shame; tax evasion; expérience; fraude fiscale; honte; mesures physiologiques; neuro-économie (search for similar items in EconPapers)
Date: 2007
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00196332
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Published in 2007

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Related works:
Working Paper: Tax Evasion: Cheating Rationally or Deciding Emotionally? (2007) Downloads
Working Paper: Tax Evasion: Cheating Rationally or Deciding Emotionally? (2007) Downloads
Working Paper: Tax Evasion: Cheating Rationally or Deciding Emotionally? (2007) Downloads
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