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Uncertainty resolution in tax experiments: Why waiting for an audit increases compliance

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  • Muehlbacher, Stephan
  • Mittone, Luigi
  • Kastlunger, Barbara
  • Kirchler, Erich

Abstract

Tax compliance in a between-subjects experiment was higher when the uncertainty about the occurrence of an audit was not resolved until three weeks after participants had filed their tax returns than in a control treatment with immediate uncertainty resolution. Results have important implications for experimental tax research where providing immediate feedback whether participants are audited is common practice.

Suggested Citation

  • Muehlbacher, Stephan & Mittone, Luigi & Kastlunger, Barbara & Kirchler, Erich, 2012. "Uncertainty resolution in tax experiments: Why waiting for an audit increases compliance," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(3), pages 289-291.
  • Handle: RePEc:eee:soceco:v:41:y:2012:i:3:p:289-291
    DOI: 10.1016/j.socec.2012.01.006
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    References listed on IDEAS

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    5. Mittone, Luigi, 2006. "Dynamic behaviour in tax evasion: An experimental approach," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(5), pages 813-835, October.
    6. Toke Ward Petersen, 2004. "General Equilibrium Tax Policy with Hyperbolic Consumers," Computational Economics, Springer;Society for Computational Economics, vol. 23(2), pages 105-120, March.
    7. R. Cookson, 2000. "Framing Effects in Public Goods Experiments," Experimental Economics, Springer;Economic Science Association, vol. 3(1), pages 55-79, June.
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    Citations

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    Cited by:

    1. Kogler, Christoph & Mittone, Luigi & Kirchler, Erich, 2016. "Delayed feedback on tax audits affects compliance and fairness perceptions," Journal of Economic Behavior & Organization, Elsevier, vol. 124(C), pages 81-87.
    2. Dai, Zhixin & Hogarth, Robin M. & Villeval, Marie Claire, 2015. "Ambiguity on audits and cooperation in a public goods game," European Economic Review, Elsevier, vol. 74(C), pages 146-162.
    3. Pántya, József & Kovács, Judit & Kogler, Christoph & Kirchler, Erich, 2016. "Work performance and tax compliance in flat and progressive tax systems," Journal of Economic Psychology, Elsevier, vol. 56(C), pages 262-273.

    More about this item

    Keywords

    Tax compliance; Tax experiments; Audits; Uncertainty resolution;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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