International Tax and Public Finance

, Volume 24, Issue 2, pp 179–197 | Cite as

Collusive tax evasion and social norms

  • Martin Abraham
  • Kerstin Lorek
  • Friedemann Richter
  • Matthias Wrede


Although collusive tax evasion by buyers and sellers of commodities and also by employers and employees is widespread all over the world, it has rarely been analyzed in the tax evasion literature. To fill this gap and to compare collusive tax evasion with independent tax evasion, this paper develops a simple noncooperative game-theoretic model and confirms the model’s predictions in a laboratory experiment. Because collusive tax evasion involves social interaction, this paper focuses on the effect of social norms and theoretically and empirically demonstrates that the tax compliance norm has a stronger negative effect on the magnitude of collusive tax evasion than on independent tax evasion. The reason for this result is that in a collusive tax evasion game with multiple equilibria social norms affect the range of equilibria and act as an equilibrium selection device, whereas social norms need to be strongly internalized to change the behavior of taxpayers who evade taxes unobservedly.


Collusive tax evasion Third-party reporting Social norms 

JEL Classification

H26 A13 



We gratefully acknowledge the financial support from the FAUs Emerging Fields Initiative (University of Erlangen–Nürnberg). For providing the laboratory resources used in this study, we kindly thank LERN of the University of Erlangen–Nürnberg. The paper was presented at the Bavarian Public Economics Seminar 2014 in Munich, at the University of Rostock, at the 4th International Conference on The Shadow Economy, Tax Evasion and Governance 2015 in Exeter, and at the International Institute of Public Finance Conference 2015 in Dublin. The comments of the participants, especially Thiess Büttner and Markus Knell, and two anonymous referees of this journal are appreciated with gratitude.

Supplementary material

10797_2016_9417_MOESM1_ESM.pdf (119 kb)
Supplementary material 1 (pdf 119 KB)


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Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  • Martin Abraham
    • 1
  • Kerstin Lorek
    • 1
  • Friedemann Richter
    • 1
  • Matthias Wrede
    • 1
  1. 1.School of Business and EconomicsFriedrich-Alexander University Erlangen-Nürnberg (FAU)NürnbergGermany

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