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A MULTI-AGENT-BASED APPROACH TO TAX MORALE

F. W. S. LIMA

Departamento de Física, Universidade Federal do Piauí, 64049-550 Teresina, PI, Brazil

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and

GEORG ZAKLAN

Department of Economics, University of Bamberg, Feldkirchenstrasse 21, D-96045 Bamberg, Germany

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https://doi.org/10.1142/S0129183108013357Cited by:25 (Source: Crossref)

Abstract

We embed the behavior of tax evasion into the standard two-dimensional Ising model. In the presence of an external magnetic field, the Ising model is able to generate the empirically observed effect of tax morale, i.e., the phenomenon that in some countries tax evasion is either rather high or low. The external magnetic field captures the agents' trust in governmental institutions. We also find that tax authorities may curb tax evasion via appropriate enforcement mechanisms. Our results are robust for the Barabási–Albert and Voronoi–Delaunay networks.

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