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A game theoretical analysis of the impact of income inequality and ethnic diversity on fiscal corruption

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  • Roy Cerqueti

    (University of Macerata)

  • Raffaella Coppier

    (University of Macerata)

Abstract

In this paper, we construct a theoretical game model with incomplete information to analyze the tax revenues of a multiethnic country, when fiscal corruption is widespread. Our proposal is that income inequality between ethnic groups causes differences leading to prejudice and discrimination among ethnic groups themselves and, as a consequence, this affects the control of corruption and evasion. Hence, the amount of tax revenues is proven to be dependent on the relevance of the income distribution between the ethnic groups.

Suggested Citation

  • Roy Cerqueti & Raffaella Coppier, 2016. "A game theoretical analysis of the impact of income inequality and ethnic diversity on fiscal corruption," Annals of Operations Research, Springer, vol. 243(1), pages 71-87, August.
    • Handle: RePEc:spr:annopr:v:243:y:2016:i:1:d:10.1007_s10479-014-1567-9
    DOI: 10.1007/s10479-014-1567-9
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    Cited by:

    1. Gaetano T. Spartà & Gabriele Stabile, 2018. "Tax compliance with uncertain income: a stochastic control model," Annals of Operations Research, Springer, vol. 261(1), pages 289-301, February.

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