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Deception choice and self-selection – The importance of being earnest

Author

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  • Konrad, Kai A.
  • Lohse, Tim
  • Qari, Salmai

Abstract

We study deception choices, the self-selection of capable and less capable deceivers and deception detection in a tax compliance experiment. We find large systematic differences between whether subjects are perceived as honest or as dishonest. Taxpayers are seemingly aware of these perceptions. The empirical outcomes are in line with a theory suggesting that taxpayers make their tax compliance choices on the basis of these perceptions. Taxpayers who are perceived as honest self-select since they are more likely to underreport. This selection effect is stronger if the fines for underreporting are high.

Suggested Citation

  • Konrad, Kai A. & Lohse, Tim & Qari, Salmai, 2014. "Deception choice and self-selection – The importance of being earnest," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 25-39.
  • Handle: RePEc:eee:jeborg:v:107:y:2014:i:pa:p:25-39
    DOI: 10.1016/j.jebo.2014.07.012
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    1. repec:kap:expeco:v:20:y:2017:i:2:d:10.1007_s10683-016-9488-x is not listed on IDEAS
    2. repec:bla:scandj:v:119:y:2017:i:3:p:821-850 is not listed on IDEAS
    3. Lohse, Tim & Dwenger, Nadja, 2016. "Do Individuals Put Effort into Lying? Evidence From a Compliance Experiment," Annual Conference 2016 (Augsburg): Demographic Change 145616, Verein für Socialpolitik / German Economic Association.
    4. Michèle Belot & Jeroen Ven, 2017. "How private is private information? The ability to spot deception in an economic game," Experimental Economics, Springer;Economic Science Association, vol. 20(1), pages 19-43, March.
    5. Kai A. Konrad & Tim Lohse & Sven A. Simon, 2017. "Deception Under Time Pressure: Conscious Decision or a Problem of Awareness?," CESifo Working Paper Series 6671, CESifo Group Munich.
    6. Kai A. Konrad & Tim Lohse & Salmai Qari, 2017. "Compliance with Endogenous Audit Probabilities," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(3), pages 821-850, July.

    More about this item

    Keywords

    Deception; Self-selection; Tax compliance; Lie-catching;

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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