Advances in Complex Systems

Systems design utilizes top-down and bottom-up approaches to influence social or economic systems such that a desired outcome is obtained. We characterize different approaches like network controllability, network interventions, nudging and mechanism design and discuss the problems involved. We argue that systems design cannot be reduced to solving complex optimization problems.

Tax credit management system (TCMS) implemented by the State Administration of Taxation (SAT) of China in 2014 is an innovative mechanism of tax collection and management. This paper attempts to incorporate the TCMS into the model of Allingham and Sandmo [Allingham, M. G. and Sandmo, A., Income tax evasion: A theoretical analysis, $J$. Public Econ. 1(3–4) (1972) 323–338], and then proposes an agent-based tax compliance model combined with EWA model. In this model, enterprises are divided into three categories: enterprises paying taxes for better credit, paying taxes to avoid a punishment, and not paying taxes. Enterprises can borrow from banks based on their own tax credit rating. The experimental results based on the model show that: (i) When the probability of spot check is low, the actual tax behavior of some enterprises is inconsistent with the results of tax credit publicized by tax authorities. (ii) In order to reduce the proportion of tax evasion, we try to change the parameter variables of integral reward, audit probability, punishment, financial subsidy and loan interest rate. The results show that the punishment of fixed high loan interest rate on tax evasion enterprises can effectively restrain tax evasion and increase the proportion of enterprises with high credit rating.

The central subject of this paper is the relation between the macro-level of the Society and the micro-level of its individuals. In complex real-life systems, this relationship is not trivial and even the result at the macro-level can be counter-intuitive. One of the first models that highlights this is the Sakoda and Schelling’s model of spatial segregation where a person uses a selfish rule to decide whether or not to leave his current place; on the basis of the ratio of “compatible” agents in the neighborhood of each individual, simulations have shown that tolerant agents group together beyond what their own tolerance imposes. This paper compares the macro-behavior arising from either selfish or altruist micro-motives; for this purpose, we propose agent-based computational models based, respectively, on selfishness, altruism and a mixture of both. Computational simulations show that (i) in a totally altruistic population, a vast majority becomes satisfied as if the agents were themselves selfish and end up spatially segregated; (ii) altruist micro-motives allow to reduce both the micro-macro gap and the segregation phenomenon; (iii) in a mixed population, the macro-effect depends both on the respective weight of each micro-motives and the allocation strategy.

In our multi-agent model, agents generate wealth from repeated interactions for which a prisoner’s dilemma payoff matrix is assumed. Their gains are taxed by a government at a rate $\alpha$. The resulting budget is spent to cover administrative costs and to pay a bonus to cooperative agents, which can be identified correctly only with a probability $p$. Agents decide at each time step to choose either cooperation or defection based on different information. In the local scenario, they compare their potential gains from both strategies. In the global scenario, they compare the gains of the cooperative and defective subpopulations. We derive analytical expressions for the critical bonus needed to make cooperation as attractive as defection. We show that for the local scenario the government can establish only a medium level of cooperation because the critical bonus increases with the level of cooperation. In the global scenario, instead full cooperation can be achieved once the cold-start problem is solved because the critical bonus decreases with the level of cooperation. This allows to lower the tax rate, while maintaining high cooperation.