Narrow Results

This paper investigates multi-item moral hazard with auditing contests.s Although the presented model is widely applicable, we choose tax evasion as an exemplary application. We introduce a tax-evasion model where tax authority and taxpayer invest in detection and concealment. The taxpayers have multiple potential income sources and are heterogeneous with respect to their evasion scruples. The tax authority — unable to commit to an audit strategy — observes a tax declaration and chooses its auditing efforts. We show that the tax authority prefers to audit source by source until it finds evidence for evasion to conduct a full-scale audit thereafter. Furthermore, we provide an explanation for why economic actors engage in both the formal and informal sector at the same time.

German biotech innovator Altona Diagnostics launches BioNexus-certified regional hub in Malaysia: ADT Biotech Sdn Bhd.

FEI launches "Explore the Unseen" image contest in partnership with National Geographic.

BIO applauds Representative Kaptur's Energy Investment Act of 2012.

Cytori to utilize Sistemic's SistemQC™ to strengthen understanding of mechanisms & support design of Next-Generation Cell Therapies.

Bosch packaging technology and Sartorius Stedim Biotech introduce PreVAS.

CellCentric and ZoBio enter into partnership to develop lead compounds against epigenetic drug targets.

Two adversarial actors interact controversially. Early incomplete evidence emerges about which actor is at fault. In period 1 of a two-period game, two media organizations identify ideologically with each of the two actors who are the players exerting manipulation efforts to support the actor they represent. In period 2, the full evidence emerges. Again, the two players exert efforts to support their preferred actor. This paper illustrates the players’ strategic dilemmas for the typical event that actor 1 is considerably at fault based on the early evidence, and much less at fault based on the full evidence. The model assumes that exerting effort in period 1 implies reward or punishment in period 2 depending on whether the full evidence exceeds the early evidence. Twelve parameters in the model are varied individually relative to a benchmark. For example, the players’ efforts are inverse U shaped to an extent in which the actors they identify with are at fault in the two periods. Increasing the evidence ratio intensity causes lower efforts since the players become more unequally matched.