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This article reports on the results from a small-scale investigation of the compliance effects of a costly pre-audit on tax compliance. The tax compliance game is modelled in three parts: a declaration phase, a pre-selection phase with a cost for taxpayers and an audit selection phase where all evaded income is discovered. While the theoretical predictions are ambiguous, the data from a series of laboratory experiments demonstrate that the presence of pre-audit costs leads to lower tax compliance.

Increasing private wildfire risk mitigation is an important part of the larger forest restoration policy challenge. Data from an economic experiment are used to evaluate the effectiveness of providing fuel reductions on public land adjacent to private land to induce private wildfire risk mitigation. Results show evidence of “crowding out” where public spending can decrease the level of private risk mitigation. Findings also indicate that spending on private mitigation efforts increase when information about individual expenditures are made available and spending on public land fuel reductions are conditional upon a threshold level of private mitigation effort being achieved.

development and experimental testing of two endogenous audit mechanisms that use contemporaneous relative comparisons, based on disclosed information or imperfect signals of compliance effort, to generate a compliance competition among agents. This type of audit mechanism has some advantages over the more widely studied dynamic audit mechanisms that condition an agent’s audit probability on past compliance, and provides an alternative explanation for the stylized fact, in many settings, that most agents are compliant most of the time even though audit rates and expected penalties are low.

A series of experiments was designed and implemented to investigate cross-cultural differences in preferences for contributing to local public goods. The research investigates differences between contributions made by participants from the United States, Russia and Kazakhstan. In these experiments each participant has three options: keep money for herself, contribute to a public good that benefits a small group (the local good), or contribute to a public good that benefits the entire group (the global good). The researchers find significant differences in contribution patterns across the three cultures, and find that all participants contribute significantly more to the small group public good than to the large group public good.

Production requiring licensing groups of complementary patents implements a coordination game among patent holders, who can price patents by choosing among combinations of fixed and royalty fees. Summed across patents, these fees become the total producer cost of the package of patents. Royalties, because they function as excise taxes, add to marginal costs, resulting in higher prices and reduced quantities of the downstream product and lower payoffs to the patent holders. Using fixed fees eliminates this inefficiency but yields a more complex coordination game in which there are multiple equilibria, which are very fragile in that small mistakes can lead the downstream firm to not license the technology, resulting in inefficient outcomes. We report on a laboratory market investigation of the efficiency effects of coordinated pricing of patents in a patent pool. We find that pool-like pricing agreements can yield fewer coordination failures in the pricing of complementary patents.

Our working hypothesis is that cross-cultural differences in tax compliance behavior have foundations in the institutions of tax administration and citizen assessment of the quality of governance. Tax compliance being a complex behavioral issue, its investigation requires use of a variety of methods and data sources. Results from artefactual field experiments conducted in countries with substantially different political histories and records of governance quality demonstrate that observed differences in tax compliance levels persist over alternative levels of enforcement. The experimental results are shown to be robust by replicating them for the same countries using survey response measures of tax compliance.

Individuals with income not reported to the tax authority by a third party (e.g., the self-employed, those earning tips) may be less likely to be detected evading taxes relative to the case in which their income is subject to third-party reporting. However, their compliance responses—to changes in the proportion of income that is reported to the tax authority, to changes in audit and tax rates, etc.—are largely unknown, in part because of the difficulty in obtaining information on individual choices in these situations. The authors use experimental methods to examine individual income tax compliance in settings where individuals differ in the portion of their income that is ‘‘matched’’ (reported to the tax authority via third-party information) versus ‘‘non-matched’’ (not fully reported to the tax authority). The results indicate that individuals who have relatively more non-matched income exhibit significantly lower tax compliance rates than individuals who earn relatively less non-matched income.

The question for the tax authority is how individuals become aware of enforcement effort. To be an effective tool in reducing tax evasion taxpayers must be aware of the current audit and penalty regime. We use laboratory experiments to examine the compliance impact of types of information dissemination regarding audit frequency and results. The information includes “official” information disseminated by the tax authority, and “unofficial”, or informal, communications among taxpayers. Our results indicate that the effect of the type of post-audit information is conditional on whether the taxpayer is well informed of the audit rate prior to filing. We find that the tax authority would be served by pre-announcing audit rates credibly and by emphasizing the previous period audit frequency in annual reporting of enforcement effort.