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Title:Customs compliance and the power of imagination PDF Logo
Authors:Konrad, Kai A.
Lohse, Tim
Qari, Salmai
Issue Date:2012
Series/Report no.:CESifo working paper: Public Finance 3702
Abstract:This paper studies the role of beliefs about own performance or appearance for compliance at the customs. In an experiment in which underreporting has a higher expected payoff than truthful reporting we find: a large share, about 15-20 percent of the subjects, is more compliant if they have reason to imagine that their performance influences their subjective audit probability. In contrast, we do not find evidence for individuals who believe that by their personal performance they can reduce the subjective probability for an audit. Our results suggest that the power of imagination, i.e. the role of second-order beliefs in the process of customs declarations is important and may potentially be used to improve customs and tax compliance.
Subjects:customs
tax compliance
audit probability
second-order beliefs
JEL:H26
H31
C91
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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