Skip to main content

Analysis of Economic Behaviour in Evolutionary Model of Tax Control Under Information Diffusion

  • 214 Accesses

Part of the Static & Dynamic Game Theory: Foundations & Applications book series (SDGTFA)

Abstract

Nowadays many economic fields are dependent on information flows. Information serves as a strategic tool in economics, business and many social processes. In particular, spreading information among taxpayers can be used as a control parameter in tax control. The probability of auditing which encourages tax payments used to be considered as a unique tool to stimulate tax collection. The current study represents a combined approach where tools of evolutionary game theory and network modeling are applied to the analysis of agents’ economic behavior. Information of possible tax auditing is disseminated across the population of taxpayers and is supposed to be a main factor influencing their decision on whether to evade or not. According to the previous research, interactions and dissemination of information or rumors among taxpayers in long-term period can be formulated as an evolutionary process. It is assumed that agents tend to spread information or rumors over their own contact network of neighbors and colleagues rather than over randomly chosen agents. Thus, the network model of social interaction is constructed. Information spreading in the network of various topology (e.g. grid, random network, etc.) is considered as an evolutionary process where agents’ behavior is described by the stochastic imitation dynamics and their interaction is described by different modifications of the bimatrix games which generate evolutionary dynamics. Scenario analysis is supported by the series of experiments. Numerous simulations help visualize the process of information spreading across different types of network, imitation protocols and players payoffs. The results show that information flow helps encourage tax payments in the population.

Keywords

  • Evolutionary games
  • Tax control
  • Information diffusion
  • Economic behavior
  • Network modeling

This is a preview of subscription content, access via your institution.

Buying options

Chapter
USD   29.95
Price excludes VAT (USA)
  • DOI: 10.1007/978-3-030-51941-4_9
  • Chapter length: 20 pages
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
eBook
USD   139.00
Price excludes VAT (USA)
  • ISBN: 978-3-030-51941-4
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
Softcover Book
USD   179.99
Price excludes VAT (USA)
Hardcover Book
USD   179.99
Price excludes VAT (USA)
Fig. 9.1
Fig. 9.2
Fig. 9.3
Fig. 9.4
Fig. 9.5
Fig. 9.6
Fig. 9.7
Fig. 9.8
Fig. 9.9
Fig. 9.10
Fig. 9.11
Fig. 9.12
Fig. 9.13
Fig. 9.14
Fig. 9.15
Fig. 9.16

References

  1. Andrei, A.L. Comer, K., Koehler M.: An agent-based model of network effects on tax compliance and evasion. J. Econ. Psychol. 40, 119–133 (2014)

    CrossRef  Google Scholar 

  2. Antocia, A., Russua, P., Zarrib, L.: Tax evasion in a behaviorally heterogeneous society: An evolutionary analysis. Econ. Modell. 10(42), 106–115 (2014)

    CrossRef  Google Scholar 

  3. Antunes, L., Balsa J., Urbano, P., Moniz, L., Roseta-Palma, C.: Tax compliance in a simulated heterogeneous multi-agent society. In: Sichman, J.S., Antunes, L. (eds.) Multi-Agent-Based Simulation VI. MABS 2005. LNCS, vol. 3891, pp. 147–161. Springer, Berlin, Heidelberg (2006)

    CrossRef  Google Scholar 

  4. Boure, V., Kumacheva, S.: A model of audit with using of statistical information about taxpayers’ income. Vestnik SPbGU 10(1–2), 140–145 (2005) (in Russian)

    Google Scholar 

  5. Boure, V., Kumacheva, S.: A game theory model of tax auditing using statistical information about taxpayers. Vestnik SPbGU 10(4), 16–24 (2010) (in Russian)

    Google Scholar 

  6. Carrera, E.J.S., Gubar, E., Oleynik, A.F.: Network structures and poverty traps. Dyn. Games Appl. 9(1), 236–253 (2019)

    MathSciNet  CrossRef  Google Scholar 

  7. Chander, P., Wilde, L.L.: A general characterization of optimal income tax enforcement. Rev. Econ. Stud. 65, 165–183 (1998)

    MathSciNet  CrossRef  Google Scholar 

  8. Cheng, D., He, F., Qi, H., Xu, T.: Modeling, analysis and control of networked evolutionary games. IEEE Trans. Autom. Control 60(9), 2402–2415 (2015)

    MathSciNet  CrossRef  Google Scholar 

  9. Goffman, W., Newill, V.A.: Generalization of epidemic theory: An application to the transmission of ideas. Nature 204(4955), 225–228 (1964)

    CrossRef  Google Scholar 

  10. Gubar, E., Kumacheva, S., Zhitkova, E., Kurnosykh, Z.: Evolutionary behavior of taxpayers in the model of information dissemination. In: Proceedings of the Constructive Nonsmooth Analysis and Related Topics (Dedicated to the Memory of V.F. Demyanov, CNSA 2017), pp. 1–4. IEEE Conference Publications, St. Petersburg (2017)

    Google Scholar 

  11. Gubar, E., Kumacheva, S., Zhitkova, E., Kurnosykh, Z., Skovorodina, T.: Modelling of information spreading in the population of taxpayers: evolutionary approach. Contrib. Game Theory Manag. 10, 100–128 (2017)

    MathSciNet  MATH  Google Scholar 

  12. Gubar, E.A., Kumacheva, S.Sh., Zhitkova, E.M., Porokhnyavaya, O.Yu.: Propagation of information over the network of taxpayers in the model of tax auditing. In: Proceedings of the 2015 International Conference on Stability and Control Processes in Memory of V.I. Zubov (SCP 2015), pp. 244–247. IEEE Conference Publications, St. Petersburg (2015)

    Google Scholar 

  13. Gubar, E., Kumacheva, S., Zhitkova, E., Tomilina, G.: Modeling of the impact of information on tax audits on the risk statuses and evasions of individuals. Vestnik SPbGU 15(2), 245–258 (2019) (in Russian)

    Google Scholar 

  14. Hashimzade, N., Myles, G.D. Page F., Rablen M.D.: Social networks and occupational choice: The endogenous formation of attitudes and beliefs about tax compliance. J. Econ. Psychol. 40, 134–146 (2014)

    CrossRef  Google Scholar 

  15. Kandhway, K., Kuri, J.: Optimal control of information epidemics modeled as Maki Thompson rumors. Commun. Nonlinear Sci. Numer. Simul. (2014, Preprint)

    Google Scholar 

  16. Kendall, M.G., Stuart, A.: Distribution Theory (in Russian). Nauka, Moscow (1966)

    MATH  Google Scholar 

  17. Kumacheva, S.Sh.: Tax auditing using statistical information about taxpayers. Contrib. Game Theory Manag. 5, 156–167 (2012)

    MathSciNet  MATH  Google Scholar 

  18. Kumacheva, S.Sh., Gubar, E.A.: Evolutionary model of tax auditing. Contrib. Game Theory Manag. 8, 164–175 (2015)

    MathSciNet  MATH  Google Scholar 

  19. Kumacheva, S., Gubar, E., Zhitkova, E., Tomilina, G.: Evolution of risk-statuses in one model of tax control. In: Petrosyan, L., Mazalov, V., Zenkevich, N. (eds.) Frontiers of Dynamic Games. Static & Dynamic Game Theory: Foundations & Applications. pp. 121–138. Birkhauser, Cham (2018)

    CrossRef  Google Scholar 

  20. Kumacheva, S., Gubar, E., Zhitkova, E., Tomilina, G.: Modeling the behaviour of economic agents as a response to information on tax audits. In: Agarwal, N., Sakalauskas, L., Weber, G.-W. (eds.) Modeling and Simulation of Social-Behavioral Phenomena in Creative Societies. First International EURO Mini Conference (MSBC 2019) Proceedings, pp. 96–111. Springer International Publishing (2019)

    Google Scholar 

  21. Luthi, L., Tomassini, M., Pestelacci, E.: Evolutionary games on networks and payoff invariance under replicator dynamics. Biosystems 96(3), 213–222 (2009)

    CrossRef  Google Scholar 

  22. Nekovee, A.M., Moreno Y., Bianconi G., Marsili M.: Theory of rumor spreading in complex social networks. Physica A 374, 457–470 (2007)

    CrossRef  Google Scholar 

  23. Owen, G.: Game Theory. Saunders Company, Philadelphia: London: Toronto (1968)

    Google Scholar 

  24. Reinganum J.R., Wilde L.L.: Income tax compliance in a principal-agent framework. J. Public Econ. 26, 1–18 (1985)

    CrossRef  Google Scholar 

  25. Riehl, J. R., Cao, M.: Control of stochastic evolutionary games on networks. In: 5th IFAC Workshop on Distributed Estimation and Control in Networked Systems, pp. 458–462, Philadelphia, PA, United States (2015)

    Google Scholar 

  26. Riehl, J. R., Cao M.: Towards optimal control of evolutionary games on networks. IEEE Trans. Autom. Control 62(1), 458–462 (2017)

    MathSciNet  CrossRef  Google Scholar 

  27. Sanchez I., Sobel J.: Hierarchical design and enforcement of income tax policies. J. Public Econ. 50, 345–369 (1993)

    CrossRef  Google Scholar 

  28. Sandholm, W.H.: Population Games and Evolutionary Dynamics. MIT Press, Cambridge, MA (2010)

    MATH  Google Scholar 

  29. Schlad, K.H.: Why imitate, and if so, how? A boundedly rational approach to multi-armed bandits. J. Econ. Theory 7(1), 130–156 (1998)

    Google Scholar 

  30. Skyrms, B.: The Stag Hunt and the Evolution of Social Structure. Cambridge University Press, Cambridge (2003)

    CrossRef  Google Scholar 

  31. The web-site of the Russian Federation State Statistics Service, http://www.gks.ru/

  32. Vasin, A., Morozov, V.: The Game Theory and Models of Mathematical Economics. MAKSpress (in Russian), Moscow (2005)

    Google Scholar 

  33. Vasina, P.A.: Otimal tax enforcement with imperfect taxpayers and inspectors. Comput. Math. Model. 14(3), 309–318 (2003)

    MathSciNet  CrossRef  Google Scholar 

  34. Vasin, A.A., Panova, E.I.: Tax collection and corruption in Fiscal Bodies. Final Report on EERC Project, 31 p. (1999)

    Google Scholar 

  35. Weibull, J.: Evolutionary Game Theory. MIT Press, Cambridge, MA (1995)

    MATH  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Suriya Kumacheva .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and Permissions

Copyright information

© 2020 The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG

About this paper

Verify currency and authenticity via CrossMark

Cite this paper

Kumacheva, S., Gubar, E., Zhitkova, E., Tomilina, G. (2020). Analysis of Economic Behaviour in Evolutionary Model of Tax Control Under Information Diffusion. In: Petrosyan, L.A., Mazalov, V.V., Zenkevich, N.A. (eds) Frontiers of Dynamic Games. Static & Dynamic Game Theory: Foundations & Applications. Birkhäuser, Cham. https://doi.org/10.1007/978-3-030-51941-4_9

Download citation