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Cheating, emotions, and rationality: an experiment on tax evasion

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  • Giorgio Coricelli

    ()

  • Mateus Joffily

    ()

  • Claude Montmarquette

    ()

  • Marie Villeval

    ()

Abstract

The economics-of-crime approach usually ignores the emotional cost and benefit of cheating. In this paper, we investigate the relationships between emotions, deception, and rational decision-making by means of an experiment on tax evasion. Emotions are measured by skin conductance responses and self-reports. We show that the intensity of anticipated and anticipatory emotions before reporting positively correlates with both the decision to cheat and the proportion of evaded income. The experienced emotional arousal after an audit increases with the monetary sanctions and the arousal is even stronger when the evader's picture is publicly displayed. We also find that the risk of a public exposure of deception deters evasion whereas the amount of fines encourages evasion. These results suggest that an audit policy that strengthens the emotional dimension of cheating favors compliance.

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1007/s10683-010-9237-5
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Bibliographic Info

Article provided by Springer in its journal Experimental Economics.

Volume (Year): 13 (2010)
Issue (Month): 2 (June)
Pages: 226-247

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Handle: RePEc:kap:expeco:v:13:y:2010:i:2:p:226-247

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Web page: http://www.springerlink.com/link.asp?id=102888

Related research

Keywords: Deception; Tax evasion; Emotions; Physiological measures; Experiment; C91; C92; D87; H26;

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References

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Citations

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Cited by:
  1. Kai A. Konrad & Tim Lohse & Salmai Qari, 2011. "Customs Compliance and the Power of Imagination," Working Papers customs_compliance_and_th, Max Planck Institute for Tax Law and Public Finance.
  2. Joel Slemrod & Thor Olav Thoresen & Erlend Eide Bø, 2013. "Taxes on the Internet: Deterrence Effects of Public Disclosure," CESifo Working Paper Series 4107, CESifo Group Munich.
  3. Mathieu Lefebvre & Pierre Pestieau & Arno Riedl & Marie-Claire Villeval, 2011. "Tax Evasion, Welfare Fraud, and the « Broken Windows » Effect : An Experiment in Belgium, France and the Netherlands," Working Papers 1116, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
  4. Matteo Cervellati & Paolo Vanin, 2010. "”Thou shalt not covet ...”: Prohibitions, Temptation and Moral Values," Working Papers 2010.54, Fondazione Eni Enrico Mattei.
  5. Roberta Calvet & James Alm, 2013. "Empathy, Sympathy, and Tax Compliance," Working Papers 1310, Tulane University, Department of Economics.

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