Global Inspection Games (GIG) in the laboratory

Miguel Sanchez Villalba

MPRA Paper from University Library of Munich, Germany

Abstract: Sanchez Villalba (2015) claims inspection games can be modelled as global games when agents face common shocks. For the tax evasion game -his leading example- he prescribes that the tax agency should audit each individual taxpayer with a probability that is a non-decreasing function of every other taxpayer's declarations ("relative auditing strategy"). This paper uses experimental data to test the predictions of the model and finds supporting evidence for the hypothesis that the relative auditing strategy is superior to the alternative "cut-off" one. It also finds that data fit the qualitative predictions of the global game model, regarding both participants' decisions and the experiment's comparative statics.

Keywords: Global Games; Experimental Economics; Tax Evasion; Rationality; Information; Beliefs (search for similar items in EconPapers)
JEL-codes: C7 C91 D8 H26 (search for similar items in EconPapers)
Date: 2017-08
New Economics Papers: this item is included in nep-acc, nep-exp, nep-gth, nep-iue and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:80715

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