IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Customs compliance and the power of imagination

  • Konrad, Kai A.
  • Lohse, Tim
  • Qari, Salmai

This paper studies the role of beliefs about own performance or appearance for compliance at the customs. In an experiment in which underreporting has a higher expected payoff than truthful reporting we find: a large share, about 15-20 percent of the subjects, is more compliant if they have reason to imagine that their performance influences their subjective audit probability. In contrast, we do not find evidence for individuals who believe that by their personal performance they can reduce the subjective probability for an audit. Our results suggest that the power of imagination, i.e. the role of second-order beliefs in the process of customs declarations is important and may potentially be used to improve customs and tax compliance.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" with number SP II 2011-108.

in new window

Date of creation: 2011
Date of revision:
Handle: RePEc:zbw:wzbfff:spii2011108
Contact details of provider: Postal:
Reichpietschufer 50, 10785 Berlin, Germany

Phone: ++49 - 30 - 25491 - 0
Fax: ++49 - 30 - 25491 - 684
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Naomi E. Feldman & Joel Slemrod, 2007. "Estimating tax noncompliance with evidence from unaudited tax returns," Economic Journal, Royal Economic Society, vol. 117(518), pages 327-352, 03.
  2. Gideon Yaniv, 2010. "The Red-Green Channel Dilemma: Customs Declaration and Optimal Inspection Policy," Review of International Economics, Wiley Blackwell, vol. 18(3), pages 482-492, 08.
  3. Charles Manski & Claudia Neri, 2013. "First- and Second-order Subjective Expectations in Strategic Decision-Making: Experimental Evidence," 2013 Meeting Papers 73, Society for Economic Dynamics.
  4. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
  5. A. Colin Cameron & Douglas L. Miller, 2010. "Robust Inference with Clustered Data," Working Papers 107, University of California, Davis, Department of Economics.
  6. Andreoni, J. & Erard, B. & Feinstein, J., 1996. "Tax Compliance," Working papers 9610, Wisconsin Madison - Social Systems.
  7. Battigalli, Pierpaolo & Dufwenberg, Martin, 2009. "Dynamic psychological games," Journal of Economic Theory, Elsevier, vol. 144(1), pages 1-35, January.
  8. Gary Charness & Martin Dufwenberg, 2006. "Promises and Partnership," Econometrica, Econometric Society, vol. 74(6), pages 1579-1601, November.
  9. Bruno S. Frey & Benno Torgler, 2006. "Tax Morale and Conditional Cooperation," IEW - Working Papers 286, Institute for Empirical Research in Economics - University of Zurich.
  10. Giorgio Coricelli & Mateus Joffily & Claude Montmarquette & Marie Villeval, 2010. "Cheating, emotions, and rationality: an experiment on tax evasion," Experimental Economics, Springer, vol. 13(2), pages 226-247, June.
  11. Parkash Chander, 1998. "A Stronger Measure of Risk Aversion and a General Characterization of Optimal Income Tax Enforcement," Economics Working Paper Archive 399, The Johns Hopkins University,Department of Economics.
  12. Henrik Jacobsen Kleven & Martin B. Knudsen & Claus Thustrup Kreiner & Søren Pedersen & Emmanuel Saez, 2011. "Unwilling or Unable to Cheat? Evidence From a Tax Audit Experiment in Denmark," Econometrica, Econometric Society, vol. 79(3), pages 651-692, 05.
  13. Miguel A. Costa-Gomes & Georg Weizsäcker, 2004. "Stated Beliefs and Play in Normal Form Games," Levine's Bibliography 122247000000000236, UCLA Department of Economics.
  14. Konrad, Kai A. & Qari, Salmai, 2009. "The last refuge of a scoundrel? Patriotism and tax compliance
    [Die letzte Zuflucht eines Schurken? Patriotismus und Steuerehrlichkeit]
    ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2009-04, Social Science Research Center Berlin (WZB).
  15. Hartner , Martina & Rechberger, Silvia & Kirchler, Erich & Schabmann, Alfred, 2008. "Procedural Fairness and Tax Compliance," Economic Analysis and Policy, Elsevier, vol. 38(1), pages 137-152, March.
  16. Reinganum, Jennifer F. & Wilde, Louis L., 1985. "Income tax compliance in a principal-agent framework," Journal of Public Economics, Elsevier, vol. 26(1), pages 1-18, February.
  17. Lundquist, Tobias & Ellingsen, Tore & Gribbe, Erik & Johannesson, Magnus, 2009. "The aversion to lying," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 81-92, May.
  18. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, vol. 1(1), pages 60-79, March.
  19. Richard A. Jensen & Jerry Thursby & Marie Thursby, 1988. "Smuggling, Camouflaging, and Market Structure," NBER Working Papers 2630, National Bureau of Economic Research, Inc.
  20. Benno Torgler, 2003. "The Importance of Faith: Tax Morale and Religiosity," CREMA Working Paper Series 2003-08, Center for Research in Economics, Management and the Arts (CREMA).
  21. Datta, Somnath & Satten, Glen A., 2005. "Rank-Sum Tests for Clustered Data," Journal of the American Statistical Association, American Statistical Association, vol. 100, pages 908-915, September.
  22. Colin F. Camerer & Teck-Hua Ho & Juin-Kuan Chong, 2004. "A Cognitive Hierarchy Model of Games," The Quarterly Journal of Economics, Oxford University Press, vol. 119(3), pages 861-898.
  23. Jeffrey M Wooldridge, 2010. "Solutions Manual and Supplementary Materials for Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262731835, December.
  24. James Alm & Todd Cherry & Michael Jones & Michael McKee, 2011. "Taxpayer Information Assistance Services and Tax Compliance Behavior," Working Papers 1101, Tulane University, Department of Economics.
  25. Joel Slemrod, 2007. "Cheating Ourselves: The Economics of Tax Evasion," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 25-48, Winter.
  26. Christoph Vanberg, 2008. "Why Do People Keep Their Promises? An Experimental Test of Two Explanations -super-1," Econometrica, Econometric Society, vol. 76(6), pages 1467-1480, November.
  27. Jeffrey M. Wooldridge, 2001. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262232197, December.
  28. Yitzhaki, Shlomo, 1974. "Income tax evasion: A theoretical analysis," Journal of Public Economics, Elsevier, vol. 3(2), pages 201-202, May.
  29. Parkash Chander & Louis L. Wilde, 1998. "A General Characterization of Optimal Income Tax Enforcement," Review of Economic Studies, Oxford University Press, vol. 65(1), pages 165-183.
  30. Alm, James, 2010. "Testing Behavioral Public Economics Theories In The Laboratory," National Tax Journal, National Tax Association, vol. 63(4), pages 635-58, December.
  31. Frey, Bruno S, 1997. "A Constitution for Knaves Crowds Out Civic Virtues," Economic Journal, Royal Economic Society, vol. 107(443), pages 1043-53, July.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:zbw:wzbfff:spii2011108. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.