Cheating, Emotions, and Rationality: An Experiment on Tax Evasion
AbstractThe 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.
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Date of creation: 2010
Date of revision:
Publication status: Published, Experimental Economics, 2010, 13, 2, 226-247
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deception ; tax evasion ; emotions ; physiological measures ; experiment;
Other versions of this item:
- Giorgio Coricelli & Mateus Joffily & Claude Montmarquette & Marie Villeval, 2010. "Cheating, emotions, and rationality: an experiment on tax evasion," Experimental Economics, Springer, vol. 13(2), pages 226-247, June.
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-08 (All new papers)
- NEP-CBE-2010-05-08 (Cognitive & Behavioural Economics)
- NEP-EXP-2010-05-08 (Experimental Economics)
- NEP-HPE-2010-05-08 (History & Philosophy of Economics)
- NEP-NEU-2010-05-08 (Neuroeconomics)
- NEP-PBE-2010-05-08 (Public Economics)
- NEP-PUB-2010-05-08 (Public Finance)
- NEP-SOC-2010-05-08 (Social Norms & Social Capital)
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