Enrique Fatas, Antonio Morales, Axel Sonntag
Working paper available on request
Publication year: 2018

We analyse corporate tax avoidance in a stylized experimental Bertrand setting with homogenous products and symmetric firms and consumers. More specifically, we investigate how market concentration and information disclosure of firms’ tax avoidance behaviour could reduce corporate tax avoidance. We find that making corporate tax behaviour more transparent by introducing a tax rating, makes consumers actively and costly boycott firms that do not pay their taxes. Firms anticipate consumer boycotts and increase their tax payments accordingly.