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摘要
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How does complexity affect people's reaction to tax changes? To answer this question, we conduct an experiment in which subjects work for a piece rate and face taxes. One treatment features a simple tax system, the other a complex one. Subjects' economic incentives are identical across treatments. We introduce the same sequence of additional taxes in both treatments. Subjects in the complex treatment underreact to new taxes; some ignore new taxes entirely. The underreaction is stronger for subjects with lower cognitive ability. Contrary to predictions from models of rational inattention, subjects are equally likely to ignore large or small incentive changes.
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INFORMATION SUPPRESSION
SHROUDED ATTRIBUTES
FISCAL ILLUSION
LOTTERY CHOICE
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期刊
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5.7
论文数:
1.4K
被引数:
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The effects of cognitive and noncognitive abilities on labor market outcomes and social behavior认知和非认知能力对劳动力市场结果和社会行为的影响

