| Abstract: | Game-theoretical models are proposed for describing the interaction of tax inspectors and taxpayers. A return-auditing probability
that maximizes net tax revenue is calculated for a model without corruption. A dynamic audit strategy is described, and it
is shown to converge to the optimal model under complete information. For a model with corruption, we also calculate the optimal
probability of secondary audit and carry out a comparative analysis of net tax revenue assuming various tax rates and various
penalties for evasion and negligent audit.
The study was partially supported by the Russian Program for Economic Studies (grant 97-3011) and Russian Foundation of Basic
Research (grant 96-01-0999). Useful comments by Mikhail Alekseev, Jim Leitzel, and Francisco Marhuenda are acknowledged.
Translated from Chislennye Metody i Vychislitel'nyi Eksperiment, Moscow State University, pp. 64–81, 1998. |
