5 research outputs found
Tax Compliance and Public Goods Provision -- An Agent-based Econophysics Approach
We calculate the dynamics of tax evasion within a multi-agent econophysics
model which is adopted from the theory of magnetism and previously has been
shown to capture the main characteristics from agent-based based models which
build on the standard Allingham and Sandmo approach. In particular, we
implement a feedback of public goods provision on the decision-making of
selfish agents which aim to pursue their self interest. Our results imply that
such a feedback enhances the moral attitude of selfish agents thus reducing the
percentage of tax evasion. Two parameters govern the behavior of selfish
agents, (i) the rate of adaption to changes in public goods provision and (ii)
the threshold of perception of public goods provision. Furtheron we analyze the
tax evasion dynamics for different agent co mpositions and under the feedback
of public goods provision. We conclude that policymakers may enhance tax
compliance behavior via the threshold of perception by means of targeted public
relations.Comment: 28 pages, 3 figures, accepted for publication in the Central European
Journal of Economic Modelling and Econometric
Model Replication in the Context of Agent-Based Simulation: Lessons Learnt from Two Case Studies
This paper examines model replication in the context of agent-based simulation through two case studies.
Replication of a computational model and validation of its results is an essential tool for scientific
researchers, but it is rarely used by modelers. In our work we address the question of validating and
verifying simulations in general, and summarize our experience in approaching different models through
replication with different motivations. Two models are discussed in details. The first one is an agent-based
spatial adaptation of a numerical model, while the second experiment addresses the exact replication of an
existing economic model
Income tax evasion dynamics: Evidence from an agent-based econophysics model
We analyze income tax evasion dynamics in a standard model of statistical mechanics, the Ising model of ferromagnetism. However, in contrast to previous research, we use an inhomogeneous multi-dimensional Ising model where the local degrees of freedom (agents) are subject to a specific social temperature and coupled to external fields which govern their social behavior. This new modeling frame allows for analyzing large societies of four different and interacting agent types. As a second novelty, our model may reproduce results from agent-based models that incorporate standard Allingham and Sandmo tax evasion features as well as results from existing two-dimensional Ising based tax evasion models. We then use our model for analyzing income tax evasion dynamics under different enforcement scenarios and point to some policy implications. --tax evasion,tax compliance,Ising Model,econophysics,numerical simulation