Analysing tax evasion dynamics via the Ising model
We develop a model of tax evasion based on the Ising model. We augment the model using an appropriate enforcement mechanism that may allow policy makers to curb tax evasion. With a certain probability tax evaders are subject to an audit. If they get caught they behave honestly for a certain number of periods. Simulating the model for a range of parameter combinations, we show that tax evasion may be controlled effectively by using punishment as an enforcement mechanism.
Year of publication: |
2008-01
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Authors: | Zaklan, Georg ; Westerhoff, Frank ; Stauffer, Dietrich |
Institutions: | arXiv.org |
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