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Subjective versus objective probability: results from seven experiments on fiscal evasion

Authors
Disciplines
  • Computer Science
  • Design
  • Psychology

Abstract

Subjective versus objective probability: results from seven experiments on fiscal evasion* Luigi Mittone1 * The experiments described here are the result of team work involving many members of the Experimental and Computational Economics Laboratory of the University of Trento. I am grateful to all them and I wish to give a special thanks to my friend Paolo Patelli, who is the author of the software used in the dynamic experiments, to Alessandra Gaburri, and to Sergio Cagol, who gave a substantial help respectively in the organisational and computational steps of the experiments. As usual all responsibility for mistakes or omissions is exclusively mine. 1 Department of Economics, University of Trento, via Inama 1, 38100 Trento, Italy 2 Introduction The starting point for this work are the results obtained from a group of experiments begun at the Laboratory of Experimental Economics of the University of Trento in 1994, and which have been designed to analyse the influences that psychological factors can play in the tax evasion decision. To explore this topic we have carried out both static, one-shot tests (Bosco and Mittone, 1994), and dynamic, repeated experiments, using two different experimental devices: the publicising of the results from the fiscal audits and the redistribution of the tax yield. The assumption for the first device is that people dislike being known to everybody as "guilty" of evasion; the second device is based on the hypothesis that the experimental subjects feel as a moral cost the awareness that they are stealing from the other participants their contribution to the tax yield. The results reported here are from two one-shot experiments respectively performed in Trento (experiment ST1) and in Milan at the Catholic University (experiment ST2) and from five repeated choices experiments carried out in Trento from 1995 till 1997 (experiments DY1, DY2, DY3, DY4 and DY5). Even if these experiments were not

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