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dc.contributor.authorKanniainen, Vesaen_US
dc.contributor.authorPääkkönen, Jennien_US
dc.date.accessioned2009-01-28T15:53:38Z-
dc.date.available2009-01-28T15:53:38Z-
dc.date.issued2004en_US
dc.identifier.urihttp://hdl.handle.net/10419/18896-
dc.description.abstractSome markets are prone to develop shadow transactions for the purpose of tax avoidance. Moral sentiments control the allocation of consumers between the legal and illicit markets. Such sentiments include self-esteem and social disapproval. The market solution leads to fiscal externality resulting from tax avoidance and highlights the conflict between private opportunism and collective values. Shadow markets may, however, enhance consumer welfare by limiting the pricing power of firms and by controlling tax collection. The paper develops a model of endogenous segmentation of markets between moral and immoral behavior. The legal producer can price the self-esteem of honest people, who can blackmail the legal producer with their option of visiting the illicit market. The model has implications for monetary economics: moral sentiments, tax rates, illegal transactions, and probability of being caught become relevant for the demand for money.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesCESifo working papers 1258en_US
dc.subject.jelD43en_US
dc.subject.jelL13en_US
dc.subject.jelH26en_US
dc.subject.jelE41en_US
dc.subject.jelD69en_US
dc.subject.ddc330en_US
dc.subject.keywordmoral sentimentsen_US
dc.subject.keywordshadow economyen_US
dc.subject.keywordwelfareen_US
dc.subject.stwEthiken_US
dc.subject.stwSchattenwirtschaften_US
dc.subject.stwWohlfahrtseffekten_US
dc.titleAnonymous money, moral sentiments and welfareen_US
dc.typeWorking Paperen_US
dc.identifier.ppn393434591en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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