Collusive Tax Evasion and Social Norms

Journal article
(Original article)


Publication Details

Author(s): Wrede M, Abraham M, Richter F, Lorek K
Journal: International Tax and Public Finance
Publication year: 2017
Volume: 24
Journal issue: 2
Pages range: 179-197
ISSN: 0927-5940
Language: English


Abstract


Although collusive tax evasion by buyers and sellers of commodities and also by employers and employees is widespread all over the world, it has rarely been analyzed in the tax evasion literature. To fill this gap and to compare collusive tax evasion with independent tax evasion, this paper develops a simple non-cooperative game-theoretic model and confirms the model's predictions in a laboratory experiment. Because collusive tax evasion involves social interaction,this paper focuses on the eect of social norms and theoretically and empirically demonstrates that the tax compliance norm has a stronger negative eect on the magnitude of collusive tax evasion than on independent tax evasion. The reason for this result is that in a collusive tax evasion game with multiple equilibria social norms aect the range of equilibria and act as an equilibrium selection device, whereas social norms need to be strongly internalized to change the behavior of taxpayers who evade taxes unobservedly.



FAU Authors / FAU Editors

Abraham, Martin Prof. Dr.
Lehrstuhl für Soziologie und Empirische Sozialforschung (Schwerpunkt Arbeitsmarktsoziologie)
Lorek, Kerstin Dr.
Lehrstuhl für Soziologie und Empirische Sozialforschung (Schwerpunkt Arbeitsmarktsoziologie)
Richter, Friedemann
Lehrstuhl für Volkswirtschaftslehre, insbesondere Sozialpolitik
Wrede, Matthias Prof. Dr.
Lehrstuhl für Volkswirtschaftslehre, insbesondere Sozialpolitik


How to cite

APA:
Wrede, M., Abraham, M., Richter, F., & Lorek, K. (2017). Collusive Tax Evasion and Social Norms. International Tax and Public Finance, 24(2), 179-197. https://dx.doi.org/10.1007/s10797-016-9417-0

MLA:
Wrede, Matthias, et al. "Collusive Tax Evasion and Social Norms." International Tax and Public Finance 24.2 (2017): 179-197.

BibTeX: 

Last updated on 2018-23-06 at 18:10