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Rank dependent expected utility models of tax evasion

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  • Erling Eide

Abstract

In this paper the rank-dependent expected utility theory is substituted for the expected utility theory in models of tax evasion. It is demonstrated that the comparative statics results of the expected utility, portfolio choice model of tax evasion carry over to the more general rank dependent expected utility model.

Suggested Citation

  • Erling Eide, 2001. "Rank dependent expected utility models of tax evasion," ICER Working Papers 27-2001, ICER - International Centre for Economic Research.
    • Handle: RePEc:icr:wpicer:27-2001
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    File URL: http://www.biblioecon.unito.it/biblioservizi/RePEc/icr/wp2001/eide27-01.pdf
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    References listed on IDEAS

    as
    1. Beck, Paul J. & Jung, Woon-Oh, 1989. "Taxpayer compliance under uncertainty," Journal of Accounting and Public Policy, Elsevier, vol. 8(1), pages 1-27.
    2. Alm, James, 1988. "Uncertain Tax Policies, Individual Behavior, and Welfare," American Economic Review, American Economic Association, vol. 78(1), pages 237-245, March.
    3. Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Gwenola Trotin, 2012. "Solving the Yitzhaki Paradox," AMSE Working Papers 1238, Aix-Marseille School of Economics, France.
    2. Amedeo Piolatto & Matthew D. Rablen, 2017. "Prospect theory and tax evasion: a reconsideration of the Yitzhaki puzzle," Theory and Decision, Springer, vol. 82(4), pages 543-565, April.
    3. Hashimzade, Nigar & Myles, Gareth D. & Rablen, Matthew D., 2016. "Predictive analytics and the targeting of audits," Journal of Economic Behavior & Organization, Elsevier, vol. 124(C), pages 130-145.
    4. Ali al-Nowaihi & Sanjit Dhami, 2010. "Rebuttal of Hashimzade, Myles and Tran-Nam (2009) “New Approaches to the Economics of Tax Evasion”," Discussion Papers in Economics 10/01, Division of Economics, School of Business, University of Leicester.
    5. Dhami, Sanjit & Al-Nowaihi, Ali, 2010. "Optimal taxation in the presence of tax evasion: Expected utility versus prospect theory," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 313-337, August.
    6. Amedeo Piolatto & Matthew D. Rablen, 2017. "Prospect theory and tax evasion: a reconsideration of the Yitzhaki puzzle," Theory and Decision, Springer, vol. 82(4), pages 543-565, April.
    7. Eide, Erling, 1998. "Optimal Provision of Public Goods with Rank Dependent Expected Utility," Public Finance = Finances publiques, , vol. 53(3-4), pages 296-311.
    8. Dhami, Sanjit & al-Nowaihi, Ali, 2007. "Why do people pay taxes? Prospect theory versus expected utility theory," Journal of Economic Behavior & Organization, Elsevier, vol. 64(1), pages 171-192, September.
    9. Gwenola Trotin, 2012. "Solving the Yitzhaki Paradox: Income Tax Evasion and Reference Dependence under Prospect Theory," Working Papers halshs-00793664, HAL.
    10. Hashimzade, Nigar & Myles, Gareth D. & Page, Frank & Rablen, Matthew D., 2014. "Social networks and occupational choice: The endogenous formation of attitudes and beliefs about tax compliance," Journal of Economic Psychology, Elsevier, vol. 40(C), pages 134-146.
    11. Nigar Hashimzade & Gareth Myles, 2017. "Risk-based Audits in a Behavioral Model," Public Finance Review, , vol. 45(1), pages 140-165, January.
    12. Philipp Meyer-Brauns, 2014. "Optimal Auditing with Heterogeneous Audit Perceptions," Working Papers tax-mpg-rps-2014-06, Max Planck Institute for Tax Law and Public Finance.

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    More about this item

    Keywords

    Tax evasion; rank dependent expected utility; dual theory;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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