How Does Trust Affect Concessionary Behavior in Tax Bargaining?

WU International Taxation Research Paper Series No. 2020-15

TRR 266 Accounting for Transparency Working Paper Series No. 41 (2020)

68 Pages Posted: 2 Nov 2020 Last revised: 6 Mar 2021

See all articles by Eva Eberhartinger

Eva Eberhartinger

Vienna University of Economics and Business

Raffael Speitmann

Vienna University of Economics and Business

Caren Sureth-Sloane

Paderborn University; Vienna University of Economics and Business; TRR 266 Accounting for Transparency

Yuchen Wu

Vienna University of Economics and Busines

Date Written: March 1, 2020

Abstract

We analyze the impact of trust on bargaining behavior between auditor and auditee in a tax setting. We study the effect of interpersonal trust and trust in government on both taxpayer and tax auditor. In an experiment with variation in pairwise trust settings, we find evidence that both kinds of trust affect the bargaining behavior, albeit in different ways. While trust in government increases taxpayers’ tax offers, interpersonal trust may lead to more concessionary behavior of tax auditors moderated by trust in government. Our findings help tax authorities to shape programs to enhance compliance in an atmosphere of trust.

Keywords: Bargaining, behavioral taxation, interpersonal trust, tax audit, trust in government

JEL Classification: C92, D91, M40, H20, H25, H83

Suggested Citation

Eberhartinger, Eva and Speitmann, Raffael and Sureth-Sloane, Caren and Wu, Yuchen, How Does Trust Affect Concessionary Behavior in Tax Bargaining? (March 1, 2020). WU International Taxation Research Paper Series No. 2020-15, TRR 266 Accounting for Transparency Working Paper Series No. 41 (2020), Available at SSRN: https://ssrn.com/abstract=3723499 or http://dx.doi.org/10.2139/ssrn.3723499

Eva Eberhartinger

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna 1020
Austria

HOME PAGE: http://www.wu.ac.at

Raffael Speitmann

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

Caren Sureth-Sloane

Paderborn University ( email )

Warburger Str. 100
Paderborn, 33098
Germany

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

TRR 266 Accounting for Transparency ( email )

Warburger Straße 100
Paderborn, 33098
Germany

Yuchen Wu (Contact Author)

Vienna University of Economics and Busines ( email )

Welthandelsplatz 1
Vienna, 1020
Austria

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