A Description of Experimental Tax Evasion Behavior Using Finite Automata: the case of Chile and Italy
In this paper we use a Moore Automata with Binary Stochastic Output Function for exploring the extensive decision on tax evasion made by subjects in experiments run in Chile and Italy. We show first how an hypothesis about subject behavior is converted into an automaton and how do we compute the probabilities of evading for every states of an automaton. We use this procedure for searching the automaton which is able to anticipate the highest number of decisions made by the subjects during the experiments. Finally we show that automata with few states perform better than automaton with many states, and that the bomb crater effect described in  is a well identified pattern of behavior in a subset of subjects.
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- Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
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Econometric Society, vol. 47(2), pages 263-91, March.
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- Luigi Mittone, 2002.
"Dynamic behaviours in tax evasion. An experimental approach,"
CEEL Working Papers
0203, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
- Mittone, Luigi, 2006. "Dynamic behaviour in tax evasion: An experimental approach," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(5), pages 813-835, October.
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