Sep 28, 2017 term paper 2

AN EXPERIMENT IS CONDUCTED IN THREE DIFFERENT COUNTRIES. PARTICIPANTS ARE TOLD THEIR INCOME…

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An experiment is conducted in three different countries. Participants are told their income levels (in units of the local currency), the tax rate, the probability of detection, and the fine structure. These parameters are the same for all participants. It is found that the amount of income not declared is, on average, different among the countries. Discuss possible explanations for this finding.



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