Tax evasion and cognitive dissonance

See on Scoop.it – Bounded Rationality and Beyond

Abstract: We introduce public signals and cognitive dissonance into the standard Allingham-Sandmo- Yitzhaki (ASY) model of tax evasion. It turns out that the pres- ence of cognitive dissonance attenuates tax evasion as individuals dislike allowing their true bevhaviour to diverge from their public statement of the “admissible” degree of tax evasion, which, in turn, they use to influence the probability of detection. Some potential policy conclusions and extensions are discussed.

 
See on hsu-hh.de

Tax evasion and cognitive dissonance

See on Scoop.it – Bounded Rationality and Beyond

Abstract: We introduce public signals and cognitive dissonance into the standard Allingham-Sandmo- Yitzhaki (ASY) model of tax evasion. It turns out that the pres- ence of cognitive dissonance attenuates tax evasion as individuals dislike allowing their true bevhaviour to diverge from their public statement of the “admissible” degree of tax evasion, which, in turn, they use to influence the probability of detection. Some potential policy conclusions and extensions are discussed.

 
See on www.hsu-hh.de

Exposure to Risk and Risk Aversion: A Laboratory Experiment

See on Scoop.it – Bounded Rationality and Beyond

Abstract: We examine whether prior exposure to environments with a varying degree of risk affects individuals’ risk-taking behavior. Using a laboratory experiment, we find that subjects exposed to a high risk environment exhibit higher levels of risk aversion than those who were exposed to a moderate or low risk environment. This effect is not driven by subjects’ realized outcomes from the risk. The finding has implications for theoretical models of decision-making under uncertainty, and can speak to a few current policy debates.

See on www3.ntu.edu.sg

Exposure to Risk and Risk Aversion: A Laboratory Experiment

See on Scoop.it – Bounded Rationality and Beyond

Abstract: We examine whether prior exposure to environments with a varying degree of risk affects individuals’ risk-taking behavior. Using a laboratory experiment, we find that subjects exposed to a high risk environment exhibit higher levels of risk aversion than those who were exposed to a moderate or low risk environment. This effect is not driven by subjects’ realized outcomes from the risk. The finding has implications for theoretical models of decision-making under uncertainty, and can speak to a few current policy debates.

See on www3.ntu.edu.sg

Insensitivity to Prices in a Dictator Game

See on Scoop.it – Bounded Rationality and Beyond

Abstract: We show that violations of demand theory are more numerous than previously reported in experimental two-player dictator games. We then apply a new procedure consisting of income-compensated price adjustments that makes the choice sets rationalizable. We introduce a “weighted price” function that shows that violations of revealed preference can be interpreted as the dictator’s insensitivity to the price of the dictator’s allocation relative to the responder’s allocation. Our paper is the first to rationalize violations of demand theory in dictator games by examining the relationship between violations of GARP and prices. We suggest that weighted prices, and not only preferences, may be a component of decision making in dictator games

 
See on cirano.qc.ca

Insensitivity to Prices in a Dictator Game

See on Scoop.it – Bounded Rationality and Beyond

Abstract: We show that violations of demand theory are more numerous than previously reported in experimental two-player dictator games. We then apply a new procedure consisting of income-compensated price adjustments that makes the choice sets rationalizable. We introduce a “weighted price” function that shows that violations of revealed preference can be interpreted as the dictator’s insensitivity to the price of the dictator’s allocation relative to the responder’s allocation. Our paper is the first to rationalize violations of demand theory in dictator games by examining the relationship between violations of GARP and prices. We suggest that weighted prices, and not only preferences, may be a component of decision making in dictator games

 

 

See on www.cirano.qc.ca