Arguably, for many citizens the perceived expected disutility from sanctions is smaller than the monetary gain from tax evasion. Nevertheless most people pay their taxes most of the time. In a lab experiment, we show that the willingness to pay taxes even absent enforcement is indeed pronounced....

This study examines whether other-regarding preferences (ORPs) can predict cheating for different beneficiaries: cheating for-self, and other-regarding cheating for an in-group or an out-group member. The results show that, on the one hand, more prosocial subjects cheat less for self compared to...

Arguably, for many citizens the perceived expected disutility from sanctions is smaller than the monetary gain from tax evasion. Nevertheless most people pay their taxes most of the time. In a lab experiment, we show that the willingness to pay taxes even absent enforcement is indeed pronounced....

This paper exploits a novel cheating game - the “Mind Game” - to show how a subtle variation in the rules of the game affects cheating. In both variants of the game, cheating is invisible because subjects make their choices purely in their minds. The only difference rests on the order of the...

Field evidence suggests that agents belonging to the same group tend to behave similarly, i.e., behavior exhibits social interaction effects. Testing for such effects raises severe identification problems. We conduct an experiment that avoids these problems. The main design feature is that each...

Field evidence suggests that people belonging to the same group often behave similarly, i.e., behavior exhibits social interaction effects. We conduct a laboratory experiment that avoids the identification problem present in the field and allows us to study the behavioral logic of social...

This paper studies the effect of endogenous audit probabilities on reporting behavior in a face-to-face compliance situation such as at customs. In an experimental setting in which underreporting has a higher expected payoff than truthful reporting we find an increase in compliance of about 80%...

The pervasive problem with tax evasion of individuals was commonly examined by analyzing the monetary costs of tax evasion (e.g. audit probability, fine and tax rate). Only recently, the analysis has been expanded to non-monetary costs of tax evasion. This paper systemizes this area of research...

This paper studies the effect of endogenous audit probabilities on reporting behavior in a face-to-face compliance situation such as at customs. In an experimental setting in which underreporting has a higher expected payoff than truthful reporting we find an increase in compliance of about 80%...

We study whether individuals in a face-to-face situation can successfully exert some lying effort to delude others. We exploit data from a laboratory experiment in which participants were asked to assess videotaped statements as being rather truthful or untruthful. The statements are...