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Cheating, emotions, and rationality: an experiment on tax evasion

Published online by Cambridge University Press:  14 March 2025

Giorgio Coricelli ,
Mateus Joffily ,
Claude Montmarquette  and
Marie Claire Villeval
Giorgio Coricelli*
Affiliation:
CNRS, Centre de neurosciences cognitives, 67, boulevard Pinel, 69675 Bron Cedex, France
Mateus Joffily*
Affiliation:
CNRS, Centre de neurosciences cognitives, 67, boulevard Pinel, 69675 Bron Cedex, France IPUB, Federal University of Rio de Janeiro, Av. Venceslau Brás, 71, 22290-140 Rio de Janeiro, Brazil
Claude Montmarquette*
Affiliation:
CIRANO, Université de Montréal, 2020 University Street, Montreal, H3A 2A5 Quebec, Canada
Marie Claire Villeval*
Affiliation:
Université de Lyon, Lyon, 69007, France GATE, CNRS, 93, Chemin de Mouilles Ecully, Ecully Cedex 69130, France IZA, Bonn, Germany CCP, Aarhus, Denmark
*
e-mail: coricelli@isc.cnrs.fr
e-mail: joffily@isc.cnrs.fr
e-mail: Claude.Montmarquette@cirano.qc.ca
e-mail: villeval@gate.cnrs.fr
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Abstract

The economics-of-crime approach usually ignores the emotional cost and benefit of cheating. In this paper, we investigate the relationships between emotions, deception, and rational decision-making by means of an experiment on tax evasion. Emotions are measured by skin conductance responses and self-reports. We show that the intensity of anticipated and anticipatory emotions before reporting income positively correlates with both the decision to cheat and the proportion of evaded income. The experienced emotional arousal after an audit increases with the monetary sanctions and the arousal is even stronger when the evader's picture is publicly displayed. We also find that the risk of a public exposure of deception deters evasion whereas the amount of fines encourages evasion. These results suggest that an audit policy that strengthens the emotional dimension of cheating favors compliance.

Keywords

DeceptionTax evasionEmotionsPhysiological measuresExperiment

JEL classification

D87: Neuroeconomics C91: Laboratory, Individual Behavior C92: Laboratory, Group Behavior H26: Tax Evasion and Avoidance
Type
Research Article
Information
Experimental Economics , Volume 13 , Issue 2 , June 2010 , pp. 226 - 247
Copyright
Copyright © Economic Science Association 2010

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Footnotes

This research was supported by a grant from the Rhône-Alpes Region (CIBLE program).

Electronic supplementary material The online version of this article (doi: 10.1007/s10683-010-9237-5) contains supplementary material, which is available to authorized users.

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Supplementary material: File

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Supplementary Material to “Cheating, Emotions, and Rationality: An Experiment on Tax Evasion”. Instructions of the experiment
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