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Citizenship and power in an agent-based model of tax compliance with public expenditure

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  • Pellizzari, Paolo
  • Rizzi, Dino

Abstract

In this paper we present a model of tax compliance with heterogeneous agents who maximize their individual utility based on income and the conjectured level of per capita public expenditure. We formally include psychological drivers in this model. These drivers affect individual behavior, such as risk aversion, together with appreciation of public expenditure, expectations about peers’ compliance and a natural inclination to comply, all of which we summarize in a quality termed “citizenship”. The enforcement system, based on random inspections, is standard and only partially known to agents.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Psychology.

Volume (Year): 40 (2014)
Issue (Month): C ()
Pages: 35-48

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Handle: RePEc:eee:joepsy:v:40:y:2014:i:c:p:35-48

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Web page: http://www.elsevier.com/locate/joep

Related research

Keywords: Tax evasion; Public expenditure; Agent-based models; Slippery slope model;

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Cited by:
  1. Benno Torgler, 2014. "Can Tax Compliance Research Profit from Biology?," QuBE Working Papers 025, QUT Business School.

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