How Does Trust Affect Concessionary Behavior in Tax Bargaining?

60 Pages Posted: 2 Nov 2020 Last revised: 26 Jan 2022

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

Ludwig Maximilian University of Munich (LMU); TRR 266 Accounting for Transparency

Date Written: January 1, 2022

Abstract

We study the bargaining behavior between auditor and auditee in a tax setting and scrutinize the effect of interpersonal trust and trust in government on both parties’ concessions. We find evidence that both kinds of trust affect the concessionary behavior, albeit in different ways. While trust in government affects concessionary behavior in line with intuitive predictions, we find that interpersonal trust only affects tax auditors. For high interpersonal trust, the alleviating effect of high trust in government on tax auditors’ concessions is less pronounced. Our findings help tax authorities to shape programs to enhance compliance in an atmosphere of trust.

Keywords: Behavioral taxation, concessionary behavior, 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? (January 1, 2022). WU International Taxation Research Paper Series No. 2020-15, TRR 266 Accounting for Transparency Working Paper Series No. 41, 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)

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

TRR 266 Accounting for Transparency ( email )

Warburger Straße 100
Paderborn, 33098
Germany

Do you want regular updates from SSRN on Twitter?

Paper statistics

Downloads
172
Abstract Views
1,229
rank
236,283
PlumX Metrics