This paper proposes a theoretical model to account for the most relevant micro- and macroeconomic empirical facts in the tax evasion literature. To do so, we integrate tax morale into a dynamic overlapping generations model of capital income tax evasion. Tax morale is modeled as a social norm...

Tax authorities utilize the audit process, imposing penalties on tax evaders, as their primary means of enforcement. In recent years, a “service” paradigm, whereby tax authorities provide information about correct tax reporting to taxpayers, has shown the potential to further “encourage”...

The focus of this study is on black markets which provide an important segment of the parallel economy. These markets operate in disequilibrium,search and information costs become very important.Trafficking in drugs taken as case, to explore both theoretically and empirically. The problem,...

Empirical studies have shown that preferences for redistribution are significantly correlated with expectations of future mobility and the belief that society offers equal opportunities. We add to previous research by investigating the role of individual and social norms on rent seeking. We find...

This report describes the Minnesota Income Tax Compliance Experiment conducted by the Minnesota Department of Revenue in 1995. The experiment tested alternative strategies to improve voluntary compliance with the state income tax. These strategies included: increased examination and auditing of...

This research note reports the results of a follow-up experiment conducted to validate an earlier experiment showing that if taxpayers overestimate the prevalence of tax evasion, their voluntary compliance can be increased by informing them about the true rate of cheating. The result confirms...

This paper studies how a firm fosters formal and informal interactions among its employees to create a collective identity and positively influence effort. We develop a model where employees have both a personal and a social ideal for effort, and where the firm can make its workforce more...

The present study attempts to provide reasons for sustainability of social norms. Here, the people are considered as competitors, where everyone tries to improve his position in the society by proving himself better than others. In this situation, a person has an incentive to punish the rule...

This paper attempts to provide reasons for sustainability of social norms by considering internalization as the basic motivation behind the punishment behavior. A society requires people to implant the social norms in others, and punishing the rule breaker provides a person utility by letting...

The need for justification is a widely observed social phenomenon. This paper develops a theoretical framework and reports laboratory evidence to show how pure justification pressure affects cooperative behavior in economic exchange environments. In a one-shot anonymous interaction, compared...