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Florian Wakolbinger and Stefan Daniel Haigner
 
''Peer advice in a tax-evasion experiment''
( 2009, Vol. 29 No.3 )
 
 
We examine peer effects in a tax-evasion experiment where subjects receive either advice or compliance data from participants with either above-median or below-median compliance rates in a control treatment. Both types of information on peer behavior yield significantly lower compliance rates than in the control group without any kind of information about peers. Receiving advice or compliance data from the pool of low-compliance participants yields the lowest compliance rates. We show that advice has a slightly bigger impact than observing the compliance of others and that subjects focus on payoff maximization rather than on tax morale when giving advice.
 
 
Keywords: Tax evasion, advice, experiments, social influence, peer effects
JEL: H2 - Taxation, Subsidies, and Revenue: General
C7 - Cooperative Game Theory
 
Manuscript Received : Jun 18 2009 Manuscript Accepted : Jul 09 2009

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