Tax avoidance, tax evasion, and tax flight: Do legal differences matter?

Although from an economic point of view, legal considerations apart, tax avoidance, tax evasion and tax flight have similar effects, namely a reduction of revenue yields, and are based on the same desire to reduce the tax burden, it is likely that individuals perceive them as different and as unequally fair. Overall, 252 fiscal officers, business students, business lawyers, and entrepreneurs produced spontaneous associations to a scenario either describing tax avoidance, tax evasion, or tax flight, and evaluated it as positive, neutral or negative. The results indicate that social representations differ with respect to tax avoidance, tax evasion, and tax flight. Tax evasion was perceived rather negatively, tax flight neutrally, and tax avoidance positively. Tax knowledge was found not to be correlated neither with tax avoidance nor with tax evasion.tax evasion; social representations; tax knowledge

Collective nostalgia and domestic country bias.

Three experiments tested and supported the hypothesis that collective nostalgia-nostalgia that is experienced when one thinks of oneself in terms of a particular social identity or as a member of a particular group and that concerns events or objects related to this group-increases individuals' ethnocentric preference for ingroup (compared to outgroup) products. Greek participants who recalled collective nostalgic experiences shared with other Greeks (compared to controls) evinced a highly robust preference for Greek (compared to foreign) consumer products. This preference is referred to as domestic country bias. Following a systematic replicate-and-extend strategy, we demonstrated that both idiographic and nomothetic inductions of collective nostalgia increased domestic country bias (Experiment 1), that collective nostalgia increased domestic country bias across different product categories (Experiment 2), and that collective self-esteem mediated the effect of collective nostalgia on domestic country bias and did so independently of positive affect (Experiment 3). We discuss theoretical and practical implications. (PsycINFO Database Record (c) 2019 APA, all rights reserved)

Overconfidence in Investment Decisions: An Experimental Approach

We experimentally test overconfidence in investment decisions by offering participants the possibility to substitute their own for alternative investment choices. Overall, 149 subjects participated in two experiments, one with just one risky asset, the other with two risky assets. Overconfidence increases (i) with the absolute deviation from optimal choices, (ii) with task complexity, and (iii) decreases with uncertainty as indicated by the difference between willingness to pay and to accept.risky decision making, behavioral finance, portfolio choice, experimental economics

Costs of implementation: Bargaining costs versus allocative efficiency

A mechanism with low direct cost of use may be preferred to alternatives implementing more efficient allocations. We show this experimentally by giving pairs of subjects the option to agree on a single average price for a sequence of trades—in effect pooling several small bargains into a larger one. We make pooling costly by tying it to some inefficient trades, but subjects nevertheless reveal strong tendencies to pool, particularly when more bargains remain to be struck and when bargaining is face to face. The results suggest that implementation costs could play a significant role in the use of many common trading practices

Teams Make You Smarter: Learning and Knowledge Transfer in Auctions and Markets by Teams and Individuals

We study the impact of team decision making on market behavior and its consequences for subsequent individual performance in the Wason selection task, the single-most studied reasoning task. We reformulated the task in terms of "assets" in a market context. Teams of traders learn the task’s solution faster than individuals and achieve this with weaker, less specific, performance feedback. Some teams even perform better than the best individuals. The experience of team decision-making in the market also creates positive knowledge spillovers for post-market individual performance in solving new Wason tasks, implying that team experiences enhance individual problem-solving skills.team decisions, markets, auctions, Wason selection task, rationality

Illusion of Expertise in Portfolio Decisions - An Experimental Approach

Overall, 72 subjects invest their endowment in four risky assets. Each com-bination of assets yields the same expected return and variance of returns. Illusion of expertise prevails when one prefers nevertheless the self-selected portfolio. After being randomly assigned to groups of four subjects are asked to elect their "expert" based on responses to a prior decision task. Using the random price mecha-nism reveals that 64% of the subjects prefer their own portfolio over the average group portfolio or the expert’s port-folio. Illusion of expertise is shown to be stable individually, over alternatives, and for both eliciting methods, willingness to pay and to accept.investment decisions, portfolio selection, overconfidence, unrealistic optimism, illusion of control, endowment effect

Tax avoidance, tax evasion, and tax flight: Do legal differences matter?

Although from an economic point of view, legal considerations apart, tax avoidance, tax evasion and tax flight have similar effects, namely a reduction of revenue yields, and are based on the same desire to reduce the tax burden, it is likely that individuals perceive them as different and as unequally fair. Overall, 252 fiscal officers, business students, business lawyers, and entrepreneurs produced spontaneous associations to a scenario either describing tax avoidance, tax evasion, or tax flight, and evaluated it as positive, neutral or negative. The results indicate that social representations differ with respect to tax avoidance, tax evasion, and tax flight. Tax evasion was perceived rather negatively, tax flight neutrally, and tax avoidance positively. Tax knowledge was found not to be correlated neither with tax avoidance nor with tax evasion

Framing effects, selective information and market behavior : an experimental analysis

The results of an asset market experiment, in which 64 subjects trade two assets on eight markets in a computerized continuous double auction, indicate that objectively irrelevant information influences trading behavior. Moreover, positively and negatively framed information leads to a particular trading pattern, but leaves trading prices and trading volume unaffected. In addition, we provide support for the disposition effect. Participants who experience a gain sell their assets more rapidly than participants who experience a loss, and positively framed subjects generally sell their assets later than negatively framed subjects

Unfamiliar face matching : Pairs out-perform individuals and provide a route to training

Matching unfamiliar faces is known to be difficult. Here, we ask whether performance can be improved by asking viewers to work in pairs, a manipulation known to increase accuracy for low-level visual discrimination tasks. Across four experiments we consistently find that face matching accuracy is higher for pairs of viewers than for individuals. This ‘pairs advantage’ is generally driven by adopting the response of the higher scoring partner. However, when the task becomes difficult, both partners’ performance is improved by working in a pair. In two experiments, we find evidence that working in a pair can lead to subsequent improvements in individual performance, specifically for viewers whose accuracy is initially low. The pairs’ technique therefore offers the opportunity for substantial improvements in face matching performance, along with an added training benefit

Does consultation improve decision-making?

This paper reports an experiment designed to test whether prior consultation within a group affects subsequent individual decision-making in tasks where demonstrability of correct solutions is low. In our experiment, subjects considered two paintings created by two different artists and were asked to guess which artist made each painting. We observed answers given by individuals under two treatments: In one, subjects were allowed the opportunity to consult with other participants before making their private decisions; in the other, there was no such opportunity. Our primary findings are that subjects in the first treatment evaluate the opportunity to consult positively, but they perform significantly worse and earn significantly less