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Commitment to tax compliance: Timing effect on willingness to evade

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  • Mittone, Luigi
  • Saredi, Viola

Abstract

Experimental and empirical literature on individual decision-making has shown a remarkable difference between planning and ongoing decisions: when asked to plan their actions, people overweight events with low probability; on the contrary, in ongoing decisions, they tend to ignore them. We report on a laboratory experiment designed to explore the presence of this decisional inconsistency in taxpayers’ behavior, by means of a commitment system for compliance. In line with the overweighting of events with small probabilities (i.e. fiscal audits), we find that planning induces the majority of people not only to adopt a mechanism of commitment to tax compliance, but also to actually comply.

Suggested Citation

  • Mittone, Luigi & Saredi, Viola, 2016. "Commitment to tax compliance: Timing effect on willingness to evade," Journal of Economic Psychology, Elsevier, vol. 53(C), pages 99-117.
    • Handle: RePEc:eee:joepsy:v:53:y:2016:i:c:p:99-117
    DOI: 10.1016/j.joep.2016.01.001
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Tax-evasion; Planning-Ongoing Gap; Risk preferences;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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