Why should I comply with taxes if others don't?: an experimental study testing informational effects

Our experimental study investigates the impact of information about others' tax behaviour on the subjects' subsequent tax decisions. A novel framework allows us to test the taste for social conformity and behavioural convergence hypothesis. Two kinds of individual information are introduced, namely information about the income reported on average, within the whole subject's group and within a subgroup, made of either peers or non peers and chosen by the subject. Our main results are fourfold. First, we replicate usual results as regards the influence of tax morale, probability of audit and redistribution on tax compliance. Second, our data show that many subjects are more interested in non-peers' than peers' tax behaviour. Third, with regard to our main point, our data display a huge variety of behavioural responses at the individual level. Roughly 50% of the subjects, most of whom are full tax compliers, are insensitive to others' tax behaviour, thereby exhibiting strong intrinsic preferences towards taxes. At the same time, our data provide strong evidence of behavioural convergence towards others' average behaviour, and a taste for social anti-conformity is also found for a minority of subjects. Finally, the kind of information appears to matter, and we find some asymmetry in upward and downward behavioural variations.