Defense spending accounts for a large share of the budget in many countries, but the value of the resulting public good - national defense - has so far escaped assessment. Much of the literature has instead considered indirect benefits of defense spending in terms of greater economic growth or...

Governments often choose deficit financing over budget cuts or tax increases to fund public goods, driven by the political unpopularity of the latter options. This study investigates the potential trade-off between maintaining prudent public finances and securing voter support by analyzing the...

We find experimental evidence that the decision problem of tax compliance changes if subjects' declarations are not randomly assessed, but is based on their appearance as captured by pictures of their faces, even if the aggregate audit probability does not change. Some subjects may fear that...

This paper studies the role of beliefs about own performance or appearance for compliance at the customs. In an experiment in which underreporting has a higher expected payoff than truthful reporting we find: a large share, about 15-20 percent of the subjects, is more compliant if they have...

We study deception choices and deception detection in a tax compliance experiment. We find large systematic differences in individual deception abilities. Tax payers are conscious about their own deception abilities. The empirical outcomes are in line with a theory suggesting that tax payers...

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 the role of face-to-face interaction for gender differences in deceptive behavior and perceived honesty. In the first part, we compare women's to men's deceptive behavior using data from an incentivized income reporting experiment in which lies can be detected in the course of an audit....

We study the role of face-to-face interaction for gender differences in deceptive behavior and perceived honesty. In the first part, we compare women to men's deceptive behavior using data from an incentivized income-reporting experiment with three treatments. Reporting is fully computerized in...

This paper studies the role of beliefs about own performance or appearance for compliance at the customs. In an experiment in which underreporting has a higher expected payoff than truthful reporting we find: a large share, about 15-20 percent of the subjects, is more compliant if they have...