Collusive Tax Evasion and Social Norms

Wrede M, Abraham M, Richter F, Lorek K (2017)

Publication Language: English

Publication Type: Journal article, Original article

Publication year: 2017


Book Volume: 24

Pages Range: 179-197

Journal Issue: 2

DOI: 10.1007/s10797-016-9417-0


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.

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How to cite


Wrede, M., Abraham, M., Richter, F., & Lorek, K. (2017). Collusive Tax Evasion and Social Norms. International Tax and Public Finance, 24(2), 179-197.


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

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