Analysing tax evasion dynamics via the Ising model
AbstractWe develop a model of tax evasion based on the Ising model. We augment the model using an appropriate enforcement mechanism that may allow policy makers to curb tax evasion. With a certain probability tax evaders are subject to an audit. If they get caught they behave honestly for a certain number of periods. Simulating the model for a range of parameter combinations, we show that tax evasion may be controlled effectively by using punishment as an enforcement mechanism.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Economic Interaction and Coordination.
Volume (Year): 4 (2009)
Issue (Month): 1 (June)
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Web page: http://www.springer.com/economics/economic+theory/journal/11403
Other versions of this item:
- Georg Zaklan & Frank Westerhoff & Dietrich Stauffer, 2008. "Analysing tax evasion dynamics via the Ising model," Papers 0801.2980, arXiv.org.
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