Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96509
Authors: 
Schüßler, Katharina
Hewig, Johannes
Kiesewetter, Dirk
Fochmann, Martin
Year of Publication: 
2014
Series/Report no.: 
Arqus-Diskussionsbeiträge zur quantitativen Steuerlehre 160
Abstract: 
We investigate the effect of taxation on gains and losses on the investment behavior of investors. Based on the insights of both economic research on the influence of taxation on investment behavior and psychological concepts dealing with the descriptive decision behavior of investors we expect investors to react to taxation of investment alternatives they face with behavioral and affective changes. By conducting a laboratory experiment with a total of 72 participants based on the experimental design of Fochmann, Kiesewetter, and Sadrieh (2012) that allows to quantify the reactions of investors to taxation on gains and loss deduction independent of their individual risk preferences and additionally measuring the affective reactions of our participants, we explore the role of affect in the relation of taxation and decision making. Hence, we are able to show that affective reactions to the taxation situations, in particular the perceived valence of these situations, influence the change in behavior of investors when confronted with taxation on gains and limited loss deduction.
Subjects: 
decision making
risk taking behavior
behavioral taxation
distorting taxation
affect
valence
JEL: 
C91
D14
H24
Document Type: 
Working Paper

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