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What Goes Around Comes Around? Experimental Evidence of the Effect of Rewards on Tax Compliance


  • Barbara Kastlunger

    (University of Vienna, Vienna, Austria,

  • Stephan Muehlbacher

    (University of Vienna, Vienna, Austria)

  • Erich Kirchler

    (University of Vienna, Vienna, Austria)

  • Luigi Mittone

    (CEEL-Computable and Experimental Economics Laboratory, University of Trento, Trento, Italy)


The current experimental study examined the effect of monetary rewards on tax compliance. Eighty-six participants were randomly assigned to one control and two reward conditions (low vs. high reward). Overall, tax compliance was not affected by the rewards. However, a change in compliance strategies was observed. It seems that rewards provoked an all-or-nothing behavior. Whereas in the reward conditions, participants were either completely honest or evaded all of their income, in the control condition, the amount of evasion varied more strongly. Furthermore, audited compliant taxpayers who are rewarded evaded less in the following period compared with audited compliant taxpayers who experienced no rewards.

Suggested Citation

  • Barbara Kastlunger & Stephan Muehlbacher & Erich Kirchler & Luigi Mittone, 2011. "What Goes Around Comes Around? Experimental Evidence of the Effect of Rewards on Tax Compliance," Public Finance Review, , vol. 39(1), pages 150-167, January.
  • Handle: RePEc:sae:pubfin:v:39:y:2011:i:1:p:150-167

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    Cited by:

    1. Enrique Fatas & Daniele Nosenzo & Martin Sefton & Daniel John Zizzo, 2015. "A self-funding reward mechanism for tax compliance," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 15-16, School of Economics, University of East Anglia, Norwich, UK..
    2. repec:exl:22evid:v:2017:y:2017:i:1:p:- is not listed on IDEAS


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