This paper reports on a laboratory experiment designed specifically to test the influence of national pride on tax honesty while using a physiological marker to observe emotional responses to ...patriotic priming. Participants were exposed to one of three framing videos before earning income in a real effort task and were given the chance to declare their taxable income. We find that psychological priming through exposure to symbols of Australian national pride and national identity had a positive effect on the level of tax compliance among Australian but not non-Australians. In addition, non-Australians report lower tax compliance ratios in the treatment groups than in the control group which may indicate an outgroup effect. When exploring the potential of a physiological marker of national pride we observe two different types of physiological responses to the activation and effects of national pride and its impact on tax compliance among Australians. Iconic images activate the parasympathetic nervous system while sports scenes activate the sympathetic nervous system, but both types of images and responses are positively associated with tax compliance. In addition, we find that non-Australians resident in the country for more than a year report a higher level of tax compliance, and that there are some similarities in heart rate variability (HRV) responses between Australian citizens born in the country and those born overseas who have been in Australia for a longer period. Overall, the results support the proposition that identifying with an ingroup at a national level is important for tax compliance.
Although paying taxes is a key element of a well-functioning society, there is still limited understanding as to why people actually pay their taxes. Models emphasizing that taxpayers make strategic, ...financially motivated compliance decisions seemingly assume an overly restrictive view of human nature. Law abidance may be more accurately explained by social norms, a concept that has gained growing importance as research attempts to understand the tax compliance puzzle. This study analyzes the influence of psychic stress generated by the possibility of breaking social norms in the tax compliance context. We measure psychic stress using heart rate variability (HRV), which captures the psychobiological or neural equivalents of psychic stress that may arise from the contemplation of real or imagined actions, producing immediate physiologic discomfort. The results of our laboratory experiments provide empirical evidence of a positive correlation between psychic stress and tax compliance, thus underscoring the importance of moral sentiments for tax compliance. We also identify three distinct types of individuals who differ in their levels of psychic stress, tax morale, and tax compliance.
•It uses heart rate variability, an established measure of stress, in a taxation experiment.•It provides physiological evidence that moral sentiment or social norms (tax morale) matter for the decision to pay taxes.•It presents experimental data indicating that feeling of guilt may explain compliant behaviour.•It looks at heterogeneity among experimental tax payers with respect to compliance behavior and physiological reactions.
Traditional survey methods can provide noisy data arising from recall, memory and other biases. Technological advances (particularly in neuroscience) are opening new ways of monitoring physiological ...processes through non-intrusive means. Such dense continuous data provide new and fruitful avenues for complementing self-reported data with a better understanding of human dynamics and human interactions. In this study, we use a survey to collect positive affect (feelings) data from more than 300 individuals over a period of 24 h, and at the same time, map their core activities (5000 recorded activities in total) with measurements of their heart rate variability (HRV). Our results indicate a robust correlation between the HRV measurements and self-reported affect. By drawing on the neuroscience and wellbeing literature we show that dynamic HRV results are what we expect for positive affect, particularly when performing activities like sleep, travel, work, exercise and eating. This research provides new insights into how to collect HRV data, model and interpret it.
Cortisol shifts financial risk preferences Kandasamy, Narayanan; Hardy, Ben; Page, Lionel ...
Proceedings of the National Academy of Sciences - PNAS,
03/2014, Letnik:
111, Številka:
9
Journal Article
Recenzirano
Odprti dostop
Risk taking is central to human activity. Consequently, it lies at the focal point of behavioral sciences such as neuroscience, economics, and finance. Many influential models from these sciences ...assume that financial risk preferences form a stable trait. Is this assumption justified and, if not, what causes the appetite for risk to fluctuate? We have previously found that traders experience a sustained increase in the stress hormone cortisol when the amount of uncertainty, in the form of market volatility, increases. Here we ask whether these elevated cortisol levels shift risk preferences. Using a double-blind, placebo-controlled, cross-over protocol we raised cortisol levels in volunteers over 8 d to the same extent previously observed in traders. We then tested for the utility and probability weighting functions underlying their risk taking and found that participants became more risk-averse. We also observed that the weighting of probabilities became more distorted among men relative to women. These results suggest that risk preferences are highly dynamic. Specifically, the stress response calibrates risk taking to our circumstances, reducing it in times of prolonged uncertainty, such as a financial crisis. Physiology-induced shifts in risk preferences may thus be an underappreciated cause of market instability.
The ultimatum bargaining game (UBG), a widely used method in experimental economics, clearly demonstrates that motives other than pure monetary reward play a role in human economic decision making. ...In this study, we explore the behaviour and physiological reactions of both responders and proposers in an ultimatum bargaining game using heart rate variability (HRV), a small and nonintrusive technology that allows observation of both sides of an interaction in a normal experimental economics laboratory environment. We find that low offers by a proposer cause signs of mental stress in both the proposer and the responder; that is, both exhibit high ratios of low to high frequency activity in the HRV spectrum.
Communication is a key determining factor of success in crowdfunding environments. In this paper, we examine the link between language used by founders and the contribution behavior of funders. ...Particularly, we investigate how verbal cues – money saliency and sustainability intention – in the communication text can affect the size of the contributing crowd and amount raised in the context of Kickstarter. Given the nature of crowdfunding environments (intrinsically motivated stakeholders) and Kickstarter's rewards-based structure, we hypothesize that there is a potential crowding-out effect in which an increased level of money saliency leads to decreased funding contributions and engagement. However, this effect should be weaker among projects that have non-selfish aims or intentions. Our analysis on close to 80,000 Kickstarter campaigns confirms that there is indeed a price to pay for using monetary-related terms in project descriptions but not among projects identified as sustainability oriented.
•Digital infrastructure provides digital entrepreneurs funding solutions but challenges in asking•Money priming may crowd out intrinsic motivations of crowdfundees in contributing•Sustainable orientation increases amount and number of contributions•No visible crowding out effect of money saliency in sustainably orientated projects•The crowding out effect of money priming is stronger in entrepreneurial settings
To measure the importance of personality and individual characteristics in such extreme environments as high-altitude mountaineering, this study investigated how physical, physiological, and/or ...hormonal markers provide insights into individual predilections for competitive and risk-taking behaviours. Because climbing outcomes depend on the ability to overcome adverse environmental conditions, avoid unnecessary risks, and exert sufficient self-regulation to handle extreme physiological and psychological stressors, it focused particularly on the relation between the successful scaling among Mount Everest climbers and risk attitudes, personality factors (from the Big Five Inventory) or traits associated with prenatal androgen exposure (2D:4D ratio). The results indicate not only that the 2D:4D ratio positively predicts lifetime mountaineering success but that the more risk averse open-minded and emotionally stable the climbers, the more active and successful compared to their peers. These findings, in addition to suggesting that human biological and psychological traits substantially influence success and long-term performance in extreme situations, offer valuable insights into how humans with different tendencies are likely to behave under such stressful conditions.
•We find an inverse S-shape in stated subjective probabilities in a novel experiment.•Prelec’s (1998) conditional invariant model provides the best fit.•We find a large degree of individual ...heterogeneity.
We examine the nature of stated subjective probabilities in a complex, evolving context in which participants are not told what the actual probability is: we collect information on subjective expectations in a computerized car race game wherein participants must bet on a particular car but cannot influence the odds of winning once the race begins. In our setup, the actual probability of the good outcome (a win) can be determined based on computer simulations from any point in the process. We compare this actual probability to the subjective probability stated by participants at three different points in each of six races. In line with previous research in which participants have direct access to actual probabilities, we find that the inverse S-shaped curve relating subjective to actual probabilities is also evident in our far more complex situation, and that there is only a limited degree of learning through repeated play. We show that the model in the inverse S-shaped function family that provides the best fit to our data is Prelec’s 1998 conditional invariant model. We also find that individuals who report a greater degree of ambiguity are more pessimistic and less responsive to actual changes in real probabilities.
•We tested the slippery slope framework of tax compliance in 44 countries.•Both trust and power increase intended tax compliance and mitigate tax evasion.•Trust increases voluntary compliance and ...power increases enforced compliance.•Power enhances voluntary compliance only if citizens trust the authorities.•Effects were relatively stable across the 44 countries.
The slippery slope framework of tax compliance emphasizes the importance of trust in authorities as a substantial determinant of tax compliance alongside traditional enforcement tools like audits and fines. Using data from an experimental scenario study in 44 nations from five continents (N = 14,509), we find that trust in authorities and power of authorities, as defined in the slippery slope framework, increase tax compliance intentions and mitigate intended tax evasion across societies that differ in economic, sociodemographic, political, and cultural backgrounds. We also show that trust and power foster compliance through different channels: trusted authorities (those perceived as benevolent and enhancing the common good) register the highest voluntary compliance, while powerful authorities (those perceived as effectively controlling evasion) register the highest enforced compliance. In contrast to some previous studies, the results suggest that trust and power are not fully complementary, as indicated by a negative interaction effect. Despite some between-country variations, trust and power are identified as important determinants of tax compliance across all nations. These findings have clear implications for authorities across the globe that need to choose best practices for tax collection.
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