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Cheating, Emotions, and Rationality: An Experiment on Tax Evasion

  • Giorgio Coricelli

    (ISC - Institut des Sciences Cognitives - CNRS - UCBL - Université Claude Bernard Lyon 1)

  • Mateus Joffily

    (ISC - Institut des Sciences Cognitives - CNRS - UCBL - Université Claude Bernard Lyon 1)

  • Claude Montmarquette

    (CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal)

  • Marie Claire Villeval


    (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS)

The economics-of-crime approach usually ignores the emotional cost and benefit of cheating. In this paper, we investigate the relationships between emotions, deception, and rational decision-making by means of an experiment on tax evasion. Emotions are measured by skin conductance responses and self-reports. We show that the intensity of anticipated and anticipatory emotions before reporting positively correlates with both the decision to cheat and the proportion of evaded income. The experienced emotional arousal after an audit increases with the monetary sanctions and the arousal is even stronger when the evader's picture is publicly displayed. We also find that the risk of a public exposure of deception deters evasion whereas the amount of fines encourages evasion. These results suggest that an audit policy that strengthens the emotional dimension of cheating favors compliance.

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Paper provided by HAL in its series Post-Print with number halshs-00462067.

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Date of creation: 2010
Date of revision:
Publication status: Published in Experimental Economics, Springer Verlag (Germany), 2010, 13 (2), pp.226-247. <10.1007/s10683-010-9237-5>
Handle: RePEc:hal:journl:halshs-00462067
DOI: 10.1007/s10683-010-9237-5
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