In markets where transactions are governed by contractual incompleteness, revealed intentions to evade taxes may affect market performance. We experimentally examine the impact of tax evasion attempts on the performance of credence goods markets, where contractual incompleteness results from...

We introduce public signals and cognitive dissonance into the standard Allingham-Sandmo-Yitzhaki (ASY) model of tax evasion. It turns out that the pres- ence of cognitive dissonanceattenuates tax evasion as individuals dislike allowing their true bevhaviour to diverge from their public statement...

Governments and tax administrators around the world rely on the premise that audits will deter tax evasion. This Article presents experimental evidence that this premise may be, at least in part, misguided. Counterintuitively, I find that audits presented as random may induce taxpayers to cheat...