Karl-Erik Wärneryd

Decision frame and opportunity as determinants of tax cheating: An international experimental study

Abstract The experimental studies described in this article were designed to examine the effects of decision frame and opportunity on tax evasion behavior in the context of a business management task that required subjects to file simulated tax returns. The data analyzed were derived from 674 subjects representing samples drawn for ten separate experiments conducted in six different countries.

Taxes and economic behavior: Some interview data on tax evasion in Sweden

Abstract The article describes a survey carried out with a sample of 426 Swedish male adults. In telephone interviews questions were asked on attitudes to taxation, attitudes to tax crimes, the respondents economic situation, tax evasion in the sense of underreporting income and overstating deductions, black payments, and tax planning, i.e. attempts to reduce the tax burden by legal means. Multivariate analyses of the data indicated that younger age, more opportunity for tax evasion than people in general, more negative attitudes than the average, and lenient attitudes to tax crimes were significant factors for explaining tax evasion and black payments. Financial strain was not a significant factor, since those who admitted tax evasion judged their economic situation more favorably than the rest of the sample.

On the psychology of saving: An essay on economic behavior

Abstract Economists used to talk about a characteristic of individuals and nations which they called ‘thrift’. Without the help of psychologists, many economists provided psychological concepts so as to explain factors contributing to thrift. This is true for economists from Adam Smith up to Keynes. Keynes (1936) formulated a ‘psychological law’ which focussed attention on the role of income for saving rather than on psychological factors. Psychological concepts almost disappeared from economic-theoretical discussions of saving. Now the life-cycle model of saving which has hardly any psychological content is the dominant theory. The theory has some inadequacies. It does not explain all saving and, in particular, it seems unable to furnish ideas about how to encourage thrift and stimulate saving. The article reviews the earlier use of psychological concepts in the study of saving and suggests that psychology can now study thrift from new angles and contribute to elucidating the problems of total savings.

The Psychology of Innovative Entrepreneurship

Many industrialized countries are somehow losing momentum in their economic development. This seems to be the case with the West European countries and the U.S.A. Lack of entrepreneurial activities is one of the major factors blamed for the negative development. Politicians and mass media in many countries frequently stress the need for innovative entrepreneurship. It is noted that Japanese entrepreneurship has made Japan prosper in an impressive way since the end of the second world war. Great expectations are founded on the possibilities of using the potentials of high technology. High technology industries provide an interesting story of innovative exploitation of research ideas in enterprises that have started out small, but rapidly grown into large complexes. Rogers and Larsen (1986) who have published a study of the rise and continued fortunes of Silicon Valley firms, talk about a Silicon Valley “fever” spreading to nations all over the world and even including the People’s Republic of China.

Economic Psychology as a Field of Study

Judging from mass media treatment of economic affairs — be it in a recession, in a more serious depression or in an upswing period — there should be ample room for psychology when economic issues are dealt with. Economists who appear in the public eye as authors of articles or as interviewees often stress the importance of psychological factors. References to psychological factors are primarily made when the factors studied by economists do not suffice to explain certain economic developments. In such contexts, it is characteristic that no reference is made to the existence of scientific psychology and that comments are based on common-sense notions about man. There seems to be little awareness and recognition of the fact that concepts such as expectations, attitudes, preferences, and motivation are actually studied in psychology and that they are considered to be amenable to measurement. Psychology is used by economists to designate factors that create individual variations in economic behavior and that consequently are responsible for making economic behavior hard to predict (cf. Maital, 1982).

Social Influence on Economic Behavior

Social psychologists stress the fact that human beings are social beings who are dependent on fellow humans for their survival and comfort. Undoubtedly, many behavioral acts and behavior in general are heavily influenced by other people. Psychology can even be seen as only a subdivision within social psychology and it can be held that psychology takes the individuals out of their natural social habitats and studies them in artifactual isolation. The social psychologist Tarde (1902) complained that economics was not based on social interaction but on the individual pursuit of self-interest, and that it disregarded the importance of the social environment for the individual. It is still true that consumer choices of products and brands as well as saving decisions are treated in economic theory as if a single individual were making the decisions.

Introduction The psychology of inflation

Abstract The introduction to the special issue on the psychology and economics of inflation deals with some of the questions that typically arise when the topic is psychology and economic behavior. An essential question is how dependable and stable over time psychological findings and methods are. The preliminary answer suggested is that there are psychological theories that have survived the test of time and which could then qualify for possible consideration when economic behavior is the concern. The contributions to the special issue are briefly commented on against this background.

Does the tax system ruin the motivation to seek advancement

Abstract A number of hypotheses related to the effects of taxes and to social comparison processes were tested by means of a mail questionnaire in a study of 338 salaried employees, mostly in middle management positions. The results indicate that the tax system with progressive income taxes and increasing marginal rates of taxation did not serve as a significant inhibitor to the promotion will. Other factors such as the acceptability of the expected net salary raise in connection with a promotion, age level and the degree of social comparison influenced the promotion will and made the picture rather complex. People who wanted to be promoted were young, compared themselves with colleagues, had a relatively low income level and attached low importance to family and leisure activities.

Ethics and economic affairs in the world of finance

Abstract Researchers in economic psychology are used to combining psychological and economic thinking in their study of behavior. However, such research in the area of business ethics is still lacking. A lot has been written about misconduct in business, but there are comparatively few studies examining what colleagues think about the behavior of the perpetrators. A study of judgments of unethical conduct in the world of finance in Sweden is reported. Anonymous brief summaries of actual cases were judged by financial executives and business students. It was found that the students were more lenient in their judgments of unethicalness, that perceived illegality of the behavior had considerable influence on the judgments, and that perceived frequency of the behavior was negatively related to the judgments.

Economic Psychology and Telecommunications Research

Telecommunications are in a period of rapid change. There is a technological development leading to new services and there is deregulation aimed at increasing competition for earlier telecom monopolies. Economic psychology has a long tradition in communication research and has due to its interdisciplinary approach some unique advantages in research on telecommunications. Some examples of current research are given and certain problem areas are pointed out as being especially interesting for researchers in economic psychology.