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An agent based model for studying optimal tax collection policy using experimental data: The cases of Chile and Italy

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  • Garrido, Nicolás
  • Mittone, Luigi

Abstract

This paper investigates optimal audit programs in an economy populated by artificial agents. The behavior of the artificial agents is calibrated using data obtained from experiments on fiscal evasion made in northern Chile (Antofagasta) and northern Italy (Trento). We identify a tax collection policy that is optimal in the sense that its outperforms the tax payments made by the calibrated agents, using any other standard collection plans used by governments. We find that the design of an optimal audit scheme depends on three components: income distribution, the identification of patterns of behaviors and the number of times individuals are audited.

Suggested Citation

  • Garrido, Nicolás & Mittone, Luigi, 2013. "An agent based model for studying optimal tax collection policy using experimental data: The cases of Chile and Italy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 42(C), pages 24-30.
    • Handle: RePEc:eee:soceco:v:42:y:2013:i:c:p:24-30
    DOI: 10.1016/j.socec.2012.11.002
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    References listed on IDEAS

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    Cited by:

    1. 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).
    2. Stephan Zheng & Alexander Trott & Sunil Srinivasa & Nikhil Naik & Melvin Gruesbeck & David C. Parkes & Richard Socher, 2020. "The AI Economist: Improving Equality and Productivity with AI-Driven Tax Policies," Papers 2004.13332, arXiv.org.
    3. Mittone, Luigi & Panebianco, Fabrizio & Santoro, Alessandro, 2017. "The bomb-crater effect of tax audits: Beyond the misperception of chance," Journal of Economic Psychology, Elsevier, vol. 61(C), pages 225-243.
    4. 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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