Arbeitspapier
The Hidden Costs of Tax Evasion: Collaborative Tax Evasion in Markets for Expert Services
We experimentally examine the impact of tax evasion attempts on the performance of credence goods markets, where contractual incompleteness results from asymmetric information on the welfare maximizing quality of the good. Our results suggest that tax evasion attempts independently of whether they are successful or not lead to efficiency losses in the form of too low quality and less frequent trade. Thus, shadow economies may reduce welfare not only by inducing agents to incur costs to hide or to uncover taxable transactions, by imposing risk on risk-averse tax evaders and by distorting competition, but also by creating an additional efficiency loss in the underlying market by forfeiting possible gains from trade and by inducing insufficient quality provision. We call this the hidden costs of tax evasion.
- Sprache
-
Englisch
- Erschienen in
-
Series: IZA Discussion Papers ; No. 9085
- Klassifikation
-
Wirtschaft
Noncooperative Games
Design of Experiments: Laboratory, Individual
Asymmetric and Private Information; Mechanism Design
Tax Evasion and Avoidance
- Thema
-
tax evasion
expert services
credence goods
fraud
experiment
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Balafoutas, Loukas
Beck, Adrian
Kerschbamer, Rudolf
Sutter, Matthias
- Ereignis
-
Veröffentlichung
- (wer)
-
Institute for the Study of Labor (IZA)
- (wo)
-
Bonn
- (wann)
-
2015
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Balafoutas, Loukas
- Beck, Adrian
- Kerschbamer, Rudolf
- Sutter, Matthias
- Institute for the Study of Labor (IZA)
Entstanden
- 2015
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