Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/112277
Authors: 
Konrad, Kai A.
Lohse, Tim
Qari, Salmai
Year of Publication: 
2015
Series/Report no.: 
DIW Discussion Papers 1493
Abstract: 
This paper studies the effect of endogenous audit probabilities on reporting behavior in a face-to-face compliance situation such as at customs. In an experimental setting in which underreporting has a higher expected payoff than truthful reporting we find an increase in compliance of about 80% if subjects have reason to believe that their behavior towards an officer influences their endogenous audit probability. Higher compliance is driven by considerations about how own appearance and performance affect their audit probability, rather than by social and psychological effects of face-to-face contact.
Subjects: 
compliance
audit probability
tax evasion
face value
customs
JEL: 
H26
H31
C91
K42
Document Type: 
Working Paper

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