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A three-state kinetic agent-based model to analyze tax evasion dynamics

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  • Crokidakis, Nuno

Abstract

In this work we study the problem of tax evasion on a fully-connected population. For this purpose, we consider that the agents may be in three different states, namely honest tax payers, tax evaders and undecided, that are individuals in an intermediate class among honests and evaders. Every individual can change his/her state following a kinetic exchange opinion dynamics, where the agents interact by pairs with competitive negative (with probability q) and positive (with probability 1−q) couplings, representing agreement/disagreement between pairs of agents. In addition, we consider the punishment rules of the Zaklan econophysics model, for which there is a probability pa of an audit each agent is subject to in every period and a length of time k detected tax evaders remain honest. Our results suggest that below the critical point qc=1/4 of the opinion dynamics the compliance is high, and the punishment rules have a small effect in the population. On the other hand, for q>qc the tax evasion can be considerably reduced by the enforcement mechanism. We also discuss the impact of the presence of the undecided agents in the evolution of the system.

Suggested Citation

  • Crokidakis, Nuno, 2014. "A three-state kinetic agent-based model to analyze tax evasion dynamics," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 414(C), pages 321-328.
    • Handle: RePEc:eee:phsmap:v:414:y:2014:i:c:p:321-328
    DOI: 10.1016/j.physa.2014.07.056
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    Citations

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    Cited by:

    1. M. L. Bertotti & G. Modanese, 2016. "Mathematical models describing the effects of different tax evasion behaviors," Papers 1701.02662, arXiv.org.
    2. Crokidakis, Nuno, 2024. "Nonequilibrium phase transitions and absorbing states in a model for the dynamics of religious affiliation," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 643(C).
    3. Cheng, Chun & Luo, Yun & Yu, Changbin, 2020. "Dynamic mechanism of social bots interfering with public opinion in network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 551(C).
    4. Giraldo-Barreto, Julian & Restrepo, J., 2021. "Tax evasion study in a society realized as a diluted Ising model with competing interactions," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 582(C).
    5. Lipiecki, Arkadiusz & Sznajd-Weron, Katarzyna, 2022. "Polarization in the three-state q-voter model with anticonformity and bounded confidence," Chaos, Solitons & Fractals, Elsevier, vol. 165(P1).
    6. M. L. Bertotti & G. Modanese, 2018. "Mathematical models describing the effects of different tax evasion behaviors," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 13(2), pages 351-363, July.
    7. V.A. Molodykh, 2021. "Impact of Short-Term Exogenous Shocks on Taxpayer Behavior and Tax Evasion," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 20(2), pages 241-268.

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