Tax evasion on a social network

Risultato della ricerca: Contributo in rivistaArticolo in rivista

4 Citazioni (Scopus)

Abstract

We relate tax evasion behavior to a substantial literature on social comparison in judgements. Taxpayers engage in tax evasion as a means to boost their expected consumption relative to others in their social network. The unique Nash equilibrium of the model relates optimal evasion to a (Bonacich) measure of network centrality: more central taxpayers evade more. Given that tax authorities are now investing heavily in big-data tools that aim to construct social networks, we investigate the value of acquiring network information. We do this using networks that allow for celebrity taxpayers, whose consumption is seen widely, and who are systematically of higher wealth. We show that there are pronounced returns to the initial acquisition of network information, especially in the presence of celebrity taxpayers.
Lingua originaleEnglish
pagine (da-a)79-91
Numero di pagine13
RivistaJOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION
Volume169
DOI
Stato di pubblicazionePubblicato - 2020

Keywords

  • Network centrality
  • Optimal auditing
  • Relative consumption
  • Social comparison
  • Social networks
  • Tax evasion

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