We test the Reduction of Compound Lotteries Axiom (RCLA) in an experiment on tax compliance. We disentangle the compound probability of audit and detection and test it against a more realistic situation with a probability of audit and a subsequent probability of detection. Various experiments have shown that abstract framing often leads to violations of the RCLA; our framed set-up also reveals statistically significant departures from the RCLA. We find that subjects comply more in the two-stage lottery set-up than they do in the one-stage equivalent and that violations are compatible with subjects applying different weighting functions to one-stage lotteries versus two-stage lotteries: inverse S-shaped - likelihood insensitive - in the former set-up; and significantly less insensitive in the latter. Violations substantially decline with subjects’ experience but not at the same rate for all groups of subjects.
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Data di pubblicazione: | 2020 | |
Titolo: | Catch Me If You Can: Testing the reduction of compound lotteries axiom in a tax compliance experiment | |
Rivista: | JOURNAL OF BEHAVIORAL AND EXPERIMENTAL ECONOMICS | |
Digital Object Identifier (DOI): | http://dx.doi.org/10.1016/j.socec.2019.101479 | |
Volume: | 84 | |
Appare nelle tipologie: | 2.1 Articolo su rivista |