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Specious Confidence after Tax Audits: A Contribition to the Dynamics of Compliance

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  • Erich Kirchler
  • Boris Maciejovsky
  • Herbert Schwarzenberger

Abstract

Dynamics of compliance, depending on audit probability, sanctions, and the time lag between audits, are investigated in a tax experiment. Compliance varied significantly over time: it decreased immediately after an audit and increased afterwards, especially if audits were frequent and sanctions high.

Suggested Citation

  • Erich Kirchler & Boris Maciejovsky & Herbert Schwarzenberger, 2003. "Specious Confidence after Tax Audits: A Contribition to the Dynamics of Compliance," Papers on Strategic Interaction 2003-14, Max Planck Institute of Economics, Strategic Interaction Group.
    • Handle: RePEc:esi:discus:2003-14
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    File URL: ftp://papers.econ.mpg.de/esi/discussionpapers/2003-14.pdf
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    References listed on IDEAS

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    6. Baldry, Jonathan C, 1987. "Income Tax Evasion and the Tax Schedule: Some Experimental Results," Public Finance = Finances publiques, , vol. 42(3), pages 357-383.
    7. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Erich Kirchler & Stephan Muehlbacher & Barbara Kastlunger & Ingrid Wahl, 2007. "Why Pay Taxes? A Review of Tax Compliance Decisions," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0730, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. James Alm & Erich Kirchler & Stephan Muehlbacher, 2012. "Combining Psychology and Economics in the Analysis of Compliance: From Enforcement to Cooperation," Economic Analysis and Policy, Elsevier, vol. 42(2), pages 133-152, September.

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    More about this item

    Keywords

    Tax evasion; Misconception of chance; Audits; Sanctions; Experimental economics;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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