The Propagation of Unethical Behaviours: Cheating Responses to Tax Evasion

64 Pages Posted: 28 Dec 2022

See all articles by Andrea FM Martinangeli

Andrea FM Martinangeli

Burgundy School of Business; University of Gothenburg - Centre for Collective Action (CeCAR)

Lisa Windsteiger

Ludwig Maximilian University of Munich (LMU) - ifo Institute (Leibniz Institute for Economic Research at the University of Munich)

Date Written: 2022

Abstract

We explore cheating in a die roll task in response to information about tax evasion in a large-scale experiment on a representative sample of the Italian population. We thus generalise laboratory findings on conditional behaviours (cooperation, cheating) to uncover their real-world bearing in the context of tax compliance. Cheating is conditioned on information about tax evasion, as is the perceived tax compliance norm. We uncover asymmetries along the income gradient: Conditional cheating responses are driven by information about tax evasion on behalf of top income earners, while perceived tax compliance norms are driven by information about tax evasion among low income earners. Instrumental variable investigations of posterior beliefs about tax evasion strengthen these results, and reveal moreover that information about top income tax evasion erodes social trust, reinforces beliefs that wealth accumulation only occurs at others’ expense, and increases beliefs that a fundamental role of the State is that of ensuring an equitable distribution of income.

Keywords: tax evasion, tax avoidance, conditional cooperation, cheating, survey experiment

JEL Classification: D010, D310, D630, H230, H260

Suggested Citation

Martinangeli, Andrea and Windsteiger, Lisa, The Propagation of Unethical Behaviours: Cheating Responses to Tax Evasion (2022). CESifo Working Paper No. 10144, Available at SSRN: https://ssrn.com/abstract=4309195 or http://dx.doi.org/10.2139/ssrn.4309195

Andrea Martinangeli (Contact Author)

Burgundy School of Business ( email )

29 Rue Sambin
Dijon, 21000
France

University of Gothenburg - Centre for Collective Action (CeCAR) ( email )

Box 100, S-405 30
Gothenburg
Sweden

Lisa Windsteiger

Ludwig Maximilian University of Munich (LMU) - ifo Institute (Leibniz Institute for Economic Research at the University of Munich) ( email )

Munich
Germany

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
45
Abstract Views
227
PlumX Metrics