South Africa, like any other country, strives towards greater tax revenue mobilisation. One possible explanation to low revenue levels is non-compliance by taxpayers. Given its implications for the provision of public goods and services, the government has instituted various enforcement measures, including (among others) reprieves (amnesties and voluntary disclosure programmes) to delinquents who voluntarily disclose their previously unreported income.
Design of Experiments: Laboratory, Individual
This paper experimentally tests whether violations of Savage's (1954) subjective expected utility theory decrease if the ambiguity of an uncertain decision situation is reduced through statistical learning. Because our data does not show such a decrease, existing models which formalize ambiguity within an Anscombe-Aumann (1963) framework - thereby reducing to expected utility theory in the absence of ambiguity - are violated.
In attempting to understand cooperation, economists have used the methods of experimental economics to focus on spheres of human behavior in which humans display altruism, reciprocity, or other social preferences through giving and through punishment. Recent work has begun to examine whether allowing allocations in the negative domain, that is, allowing subjects to take (or steal) other subjects' endowments, might affect participants' behavior.
According to the harmonic sequence paradox (Blavatskyy 2006), an expected utility decision maker's willingness to pay for a gamble whose expected payoffs evolve according to the harmonic series is finite if and only if his marginal utility of additional income becomes eventually zero. Since the assumption of zero marginal utility is implausible, expected utility theory (as well as cumulative prospect theory) does apparently do a bad job in describing this decision behaviour. The present note demonstrates that the harmonic sequence paradox only applies to time-patient