HKS Affiliated Authors
Frank Plumpton Ramsey Professor of Political Economy
Excerpt
Excerpt
Signaling with Audits: Mimicry, Wasteful Expenditures, and Non-Compliance in a Model of Tax Enforcement. Maciej Kotowski, Richard Zeckhauser, January 28, 2014, Paper. "The audit policy of a tax authority can signal its audit effectiveness. We model this process and show that in limited circumstances an ineffective authority can masquerade as being effective. We show that high maximal penalties imply underreporting of income." Link