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Tax me if you can: An artifactual field experiment on dishonesty

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  • Jacobsen, Catrine
  • Piovesan, Marco

Abstract

In this paper, we test whether increased salience of a tax charge increases dishonesty using a version of the die-under-cup paradigm. Participants earn money in proportion to the outcome reported and, thus, have an incentive to over-report. We find a significant increase in high outcomes in the presence of a tax frame suggesting that participants use the tax as an excuse to rationalize their dishonest act. In addition, we tested whether adding an explanation for the adoption of the tax would increase honesty. We find evidence for reversed dishonesty with participants reporting significantly more low outcomes. These results warn policy makers about the non-trivial relationship between taxation charges and dishonesty.

Suggested Citation

  • Jacobsen, Catrine & Piovesan, Marco, 2016. "Tax me if you can: An artifactual field experiment on dishonesty," Journal of Economic Behavior & Organization, Elsevier, vol. 124(C), pages 7-14.
  • Handle: RePEc:eee:jeborg:v:124:y:2016:i:c:p:7-14
    DOI: 10.1016/j.jebo.2015.09.009
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    Citations

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    Cited by:

    1. Christoph Engel, 2016. "Experimental Criminal Law. A Survey of Contributions from Law, Economics and Criminology," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2016_07, Max Planck Institute for Research on Collective Goods.
    2. Gilles Grolleau & Martin G. Kocher & Angela Sutan, 2014. "Cheating and Loss Aversion: Do People Lie More to Avoid a Loss?," CESifo Working Paper Series 4965, CESifo Group Munich.
    3. Johannes Abeler & Daniele Nosenzo & Collin Raymond, 2016. "Preferences for Truth-Telling," CESifo Working Paper Series 6087, CESifo Group Munich.
    4. Garbarino, Ellen & Slonim, Robert & Villeval, Marie Claire, 2016. "Loss Aversion and Lying Behavior: Theory, Estimation and Empirical Evidence," IZA Discussion Papers 10395, Institute for the Study of Labor (IZA).
    5. Gilles Grolleau & Martin G. Kocher & Angela Sutan, 2016. "Cheating and Loss Aversion: Do People Cheat More to Avoid a Loss?," Management Science, INFORMS, vol. 62(12), pages 3428-3438, December.
    6. Drupp, Moritz A. & Khadjavi, Menusch & Quaas, Martin F., 2016. "Truth-telling and the regulator: Evidence from a field experiment with commercial fishermen," Kiel Working Papers 2063, Kiel Institute for the World Economy (IfW).

    More about this item

    Keywords

    Tax evasion; Dishonesty; Framing; Rationalization;

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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