When governments intervene in response to the presence of irrationality, merit wants are provided by reference to experts. Neoclassical microeconomic theory says little about why, when, or how such intervention is required. However, literature in experimental economics identifies anomalous...

Allingham and Sandmo demonstrated that under decreasing absolute risk aversion, when the penalty for tax evasion fell on evaded income, an increase in the tax rate might increase, decrease, or leave unaltered the level of evaded income. Yitzhaki resolved the ambiguity by considering the impact...