“Optimal Honesty” in the Context of Fiscal Crimes

This paper begins by contrasting the caricatures ‘homo and femina economicus’ with ‘homo and femina realitus’. Against this backdrop, the paper considers three ‘apparently falsified’ empirical predictions of the standard expected utility model of individual decision-making concerning participation i...

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Bibliographic Details
Published in:Economies 2024-09, Vol.12 (9), p.242
Main Authors: Barile, Lory, Cullis, John, Jones, Philip
Format: Article
Language:English
Subjects:
benefit fraud
Book publishing
Costs
Decision-making
Economics
Economists
Expected utility
Fraud
Levitt, Steven D
Literature reviews
moral costs
Morality
optimal honesty
Self interest
Tax evasion
Citations: Items that this one cites
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Summary:This paper begins by contrasting the caricatures ‘homo and femina economicus’ with ‘homo and femina realitus’. Against this backdrop, the paper considers three ‘apparently falsified’ empirical predictions of the standard expected utility model of individual decision-making concerning participation in fiscal crimes: that tax evasion and benefit fraud can be treated identically; fiscal crimes should be endemic; and that all individuals, depending on parameter values, should be either honest or dishonest. A utility function relating to decisions with a moral dimension is used to offer insight into the rationalization of the predictions and involves defining an individual’s ‘optimal honesty’ in the context of fiscal crimes. The policy implications of the approach are briefly explored.
ISSN:2227-7099
2227-7099
DOI:10.3390/economies12090242