THE GOVERNMENT-TAXPAYER GAME

  • David CARFI IAMIS, Institute for the Applications of Mathematics and Integrated Sciences Department of Mathematics, University of California at Riverside, USA
  • Caterina FICI Business Administrator at VF of V. Fici, Italy

Abstract

In this paper, we model - quantitatively – a possible realistic interaction between a taxpayer and his Government. We formalize, in a general setting, this strategic interaction. Moreover, we analyze completely a particular realistic sample of the general model. We determine the entire payoff space of the sample game; we find the unique Nash equilibrium of the interaction; we determine the payoff Pareto maximal boundary, the conservative payoff zone and the conservative core of the game (part of Pareto boundary greater than the conservative payoff of the game). Finally, we suggest possible compromise solutions between the two players. From an economic point of view, the sample chosen gives an example of normative settings, for which, there is no reason (convenience), for the taxpayer, to evade the taxes or to declare less than his real income, when his behavior is conservative (defensive, risk-averse). Moreover, the two proposed compromise solutions (which realize the maximum collective gain) could be significantly applied to distinguished taxpayer (big companies and so on).

References

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Published
2017-06-12
How to Cite
CARFI, David; FICI, Caterina. THE GOVERNMENT-TAXPAYER GAME. Theoretical and Practical Research in the Economic Fields, [S.l.], v. 3, n. 1, p. 13-25, june 2017. ISSN 2068-7710. Available at: <https://journals.aserspublishing.eu/tpref/article/view/1166>. Date accessed: 23 jan. 2022.