Sanchez-Villalba, Miguel (2006) Anti-evasion auditing policy in the presence of common income shocks. DARP (80). Suntory and Toyota International Centres for Economics and Related Disciplines, London, UK.
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Abstract
When fairly homogeneous taxpayers are affected by common income shocks, a tax agency’s optimal auditing strategy consists of auditing a low-income declarer with a probability that (weakly) increases with the other taxpayers’ declarations. Such policy generates a coordination game among taxpayers, who then face both strategic uncertainty - about the equilibrium that will be selected.and fundamental uncertainty - about the type of agency they face. Thus the situation can be realistically modelled as a global game that yields a unique and usually interior equilibrium which is consistent with empirical evidence. Results are also applicable to other areas like regulation or welfare benefit allocation.
| Item Type: | Monograph (Discussion Paper) |
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| Official URL: | http://sticerd.lse.ac.uk |
| Additional Information: | © 2006 Miguel Sanchez-Villalba |
| Divisions: | STICERD |
| Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HJ Public Finance |
| JEL classification: | C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D84 - Expectations; Speculations D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H26 - Tax Evasion |
| Date Deposited: | 07 Jul 2008 07:27 |
| Last Modified: | 15 Sep 2023 23:07 |
| URI: | http://eprints.lse.ac.uk/id/eprint/6543 |
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