Arozamena, Leandro; Besfamille, Martin; Sanguinetti, Pablo - Departamento de Economía, Universidad Torcuato Di Tella - 2010
We examine the problem of a utilitarian government that sets taxes and fines for evaders but cannot commit to any enforcement policy. Given the tax law, the government and taxpayers —some of whom are honest— play a report-audit game that, depending on taxes, fines and audit costs, generates...