Behavioral Taxation (23713)

Module objectives and intended study results

• Students possess foundational knowledge of behavioral economic research in the fields of business taxation and public finance.
• Students are able to understand, evaluate, and discuss empirical academic research in the area of behavioral taxation.
• They are familiar with the basic concepts of experimental and empirical studies and can analyze the relevant literature.
• They have basic knowledge in planning and conducting their own empirical research projects and apply this knowledge in practice.
• They are capable of writing and presenting their own work in the field of behavioral taxation.

Contents

Behavioral Taxation is a relatively new approach that applies research methods and insights from behavioral economics and psychology. Its goal is to better understand individual behavior in tax-related contexts by considering factors such as social preferences, behavioral biases, and emotions. Understanding individual human behavior is highly relevant for both policymakers and businesses in order to improve their decision-making.
The course covers topics such as tax fairness, tax evasion and avoidance, behavioral taxation in tax enforcement, and behavioral aspects of investment, labor supply, and consumption decisions. The focus is placed on both business taxation and public finance perspectives.

The course is divided into two parts: (a) lectures and (b) seminar-style sessions.
In the lectures, students are introduced to the fundamentals of individual economic decision-making and behavioral taxation. Both normative models (e.g., expected utility theory) and behavioral models and findings (e.g., prospect theory) are discussed, along with the current state of research.
In the seminar sessions, small groups of students prepare academic papers that are then discussed by all participants. These discussions cover not only content-specific aspects of behavioral taxation but also general academic skills, including the structure of scientific studies, data analysis, and interpretation—always with a critical lens.
At the end of the course, students will write an assignment on a selected topic and develop their own study proposal in the field of behavioral taxation, which they will present in class.

References

• Bardsley et al.: Experimental Economics: Rethinking the Rules.
• Blaufus/Milde: Tax Misperceptions and the Effect of Informational Tax Nudges on Retirement Savings, Management Science, 2020.
• Bott et al.: You’ve Got Mail: A Randomized Field Experiment on Tax Evasion, Management Science, 2019.
• Camerer/Rabin/Loewenstein: Advances in Behavioral Economics.
• Chetty/Looney/Kroft: Salience and Taxation: Theory and Evidence, American Economic Review, 2009.
• Friedman/Sunder: Experimental Methods: A Primer for Economists.