Complexity and Distributive Fairness Interact in Affecting Compliance Behavior

47 Pages Posted: 23 Oct 2019

See all articles by Charles Bellemare

Charles Bellemare

Université Laval - Department of Economics

Marvin Deversi

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics

Florian Englmaier

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics

Date Written: 2019

Abstract

Filing income tax returns or insurance claims often requires that individuals comply with complex rules to meet their obligations. We present evidence from a laboratory tax experiment suggesting that the effects of complexity on compliance are intrinsically linked to distributive fairness. We find that compliance remains largely unaffected by complexity when income taxes are distributed to a morally justified charity. Conversely, complexity significantly amplifies non-compliance when income taxes appear wasted as they are distributed to a morally dubious charity. Our data further suggest that this non-compliance pattern is facilitated through the ambiguity that evolves from mostly unstrategic filing mistakes.

Keywords: complexity, compliance, distributive fairness, experiment

JEL Classification: C910, D010, D910, H260

Suggested Citation

Bellemare, Charles and Deversi, Marvin and Englmaier, Florian, Complexity and Distributive Fairness Interact in Affecting Compliance Behavior (2019). CESifo Working Paper No. 7899, Available at SSRN: https://ssrn.com/abstract=3474206 or http://dx.doi.org/10.2139/ssrn.3474206

Charles Bellemare (Contact Author)

Université Laval - Department of Economics ( email )

Canada

Marvin Deversi

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

Florian Englmaier

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

Ludwigstrasse 28 III/ VG
D-80539 Munich
Germany

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