In a study by Shalvi, Dana, Handgraaf, and De Dreu (2011) it was convincingly demonstrated that psychologically, the distinction between right and wrong is not discrete, rather it is a continuous distribution of relative ‘rightness’ and ‘wrongness’. Using the ‘die-under-the-cup’...

The objective of this paper is to study if taxpayers behave in a loss averse manner when filing their tax returns. This is important for tax design but also for understanding human behavior in general. The predictions of prospect theory can be contrasted to those of expected utility theory. We...

Two experiments show that eliciting taxpayer preferences on government spending—providing taxpayer agency--increases tax compliance. We first create an income and taxation environment in a laboratory setting to test for compliance with a lab tax. Allowing a treatment group to express...

Private information is at the heart of many economic activities. For decades, economists have assumed that individuals are willing to misreport private information if this maximizes their material payoff. We combine data from 72 experimental studies in economics, psychology and sociology, and...

The ability of a tax authority to successfully collect taxes depends critically on both its relationship with the taxpayers and how strongly these taxpayers are committed to contributing to the common good. We present evidence on a new non-intrusive approach aimed at fostering the commitment to...

We perform a (psychological) game-theoretic analysis of cheating in the setting proposed by Fischbacher & Föllmi-Heusi (2013). The key assumption, which we refer to as perceived cheating aversion, is that the decision maker derives disutility in proportion to the amount in which he is perceived...

We investigate the norm of just deserts and its effect on honesty. Just deserts is an essential norm in a market society, and honesty is an important factor in economic and social exchange. In particular, we analyze what happens when the social distributive rules betray the reasonable...

This paper studies how imposing norms on contribution behavior affects individuals' intrinsic motivation. We consider an urban area in Germany where the Catholic Church collects a local church levy as a charitable donation, despite the fact that the levy is legally a tax. In cooperation with the...

Tax evasion is a pervasive problem in many countries. In particular, some developing countries do not collect even half of what they would if taxpayers complied with the written letter of the law. The academic literature has not been oblivious to the need to explain why people pay (or do not...

The use of receipt-based tax lotteries to increase (VAT) tax compliance has been of growing interest amongst EU Member States. Some countries have introduced such lottery schemes, namely Malta in 1997, Slovakia in 2013 and Portugal in 2014. Others have been intrigued about the possibility of...