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Tax evasion and social information: an experiment in Belgium, France, and the Netherlands

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  • Mathieu Lefebvre
  • Pierre Pestieau
  • Arno Riedl
  • Marie Villeval

Abstract

We experimentally study how receiving information about tax compliance of others affects individuals’ occupational choices and subsequent evading decisions. In one treatment individuals receive information about the highest tax evasion rates of others in past experimental sessions with no such social information; in another treatment they receive information about the lowest tax evasion rates observed in the past sessions with no such social information. We observe an asymmetric effect of social information on tax compliance. Whereas examples of high compliance do not have any disciplining effect, we find evidence that examples of low compliance significantly increase tax evasion for certain audit probabilities. No major differences are found across countries. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Mathieu Lefebvre & Pierre Pestieau & Arno Riedl & Marie Villeval, 2015. "Tax evasion and social information: an experiment in Belgium, France, and the Netherlands," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(3), pages 401-425, June.
  • Handle: RePEc:kap:itaxpf:v:22:y:2015:i:3:p:401-425
    DOI: 10.1007/s10797-014-9318-z
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    More about this item

    Keywords

    Tax evasion; Social interactions; Peer effects ; Cross-country comparisons; Experiments; H26; D83; C91;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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