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on Evolutionary Economics |
| By: | Nicolas Jacquemet (PSE - Paris School of Economics); Stéphane Luchini (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Antoine Malezieux; Jason Shogren (UW - University of Wyoming) |
| Abstract: | Why do people pay taxes? Rational choice theory has fallen short in answering this question. Another explanation, called "tax morale", has been promoted. Tax morale captures the behavioral idea that non-monetary preferences (like norm-submission, moral emotions and moral judgments) might be better determinants of tax compliance than monetary trade-offs. Herein we report on two lab experiments designed to assess whether norm-submission, moral emotions (e.g. affective empathy, cognitive empathy, propensity to feel guilt and shame) or moral judgments (e.g. ethics principles, integrity, and moralization of everyday life) can help explain compliance behavior. Although we find statistically significant correlations of tax compliance behavior with empathy and shame, the economic significance of these correlations are low–—more than 80% of the variability in compliance remains unexplained. These results suggest that tax authorities should focus on the institutional context, rather than individual preference characteristics, to handle tax evasion. |
| Keywords: | tax evasion,tax morale,morality,personality traits,psychometrics |
| Date: | 2019–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02290402&r=all |
| By: | Fuchs-Seliger, Susanne |
| Abstract: | Describing individual behavior, we will be concerned with an axiom system, which can be interpreted by Shephard's distance function. Based on this function, one can discover the individual's preference relation, from which the individual's demand function can be derived. We will realize that the axiom system describes rational behavior, satisfying the Strong Axiom of Revealed Preference. The axiom system presented in this article is closely related to a former one describing consumer behavior by income compensation functions. These different approaches will help to illuminate choice behavior from different points of view. We will also see that the axiom system presented in this article can be interpreted by the economic quantity index in welfare theory and by distance functions in producer theory. |
| Keywords: | Economic Models,Demand Functions,Distance Functions,Rationality,Producer Theory,Welfare Theory |
| JEL: | D71 C78 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kitwps:136&r=all |
| By: | Neszveda, G. (Tilburg University, School of Economics and Management) |
| Abstract: | Despite the fact that almost everyone faces risk in their lives and it is a crucial ingredient in economic models including asset pricing models, it is still an open debate how decision-makers or even investors evaluate risk. Experimental and empirical evidence shows that the standard expected utility theory falls short of explaining many economic and asset pricing phenomena. Behavioral finance provides alternative conceptual frameworks to explain these phenomena. This dissertation consists of 3 chapters investigating the impacts of some of the conceptual frameworks in behavioral finance. Chapter 1 investigates the potential impact of the expected utility theory with an aspiration level on stock returns. Chapter 2 investigates the impact of the law of small numbers on stock returns. Chapter 3 investigates the relation between time discounting and risk taking in an experiment. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:05059039-5236-42a3-be1b-3c1be952551b&r=all |
| By: | Alexander Adamou; Yonatan Berman; Diomides Mavroyiannis; Ole Peters |
| Abstract: | An important question in economics is how people choose between different payments in the future. The classical normative model predicts that a decision maker discounts a later payment relative to an earlier one by an exponential function of the time between them. Descriptive models use non-exponential functions to fit observed behavioral phenomena, such as preference reversal. Here we propose a model of discounting, consistent with standard axioms of choice, in which decision makers maximize the growth rate of their wealth. Four specifications of the model produce four forms of discounting -- no discounting, exponential, hyperbolic, and a hybrid of exponential and hyperbolic -- two of which predict preference reversal. Our model requires no assumption of behavioral bias or payment risk. |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1910.02137&r=all |
| By: | Funjika Patricia; Getachew Yoseph |
| Abstract: | This paper estimates the relationship between differences in skills measured among‚ within-country ethnic groups and individual human capital accumulation in eight African‚ countries.Our results show that the skills of an individual in these countries depends more on the‚ human capital levels of their parents¢â‚¬â„¢ ethnic group (ethnic capital) than on parental investment.‚ Therefore, differences in initial levels of ethnic capital may explain the persistence of ethnicitybased‚ differences in educational attainment over time. Birth cohort analysis and the results from‚ an interaction effects model show that ethnic capital has a persistent effect, and that this effect is‚ higher in former British colonies than former French colonies.Using historical religion-based data‚ from the colonial and independence periods as instruments for ethnic capital, we demonstrate‚ large effects of parental ethnicity on an individual¢â‚¬â„¢s human capital skill level and show that colonial‚ origin may be important in understanding intergenerational mobility in African countries. |
| Keywords: | Intergenerational Mobility,Human capital,Education,Colonialism,Ethnicity |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2019-64&r=all |