On April 21, Another session of the ISET Research Seminar Series was held, featuring Teimuraz Gogsadze (PhD, University of Leicester), Head of the MA Program in Finance at ISET, who presented his research titled “Tax Compliance and Social Norms: A Prospect Theory Approach.”
The paper develops a model of tax compliance behavior with endogenous social norms in the prospect theory framework. It suggests that tax policy parameters not only shape monetary (dis)incentives for compliance, but also determine the strength of the social norm of compliance at equilibrium. An increase in the tax rate is found to weaken the norm of compliance, whereas a stricter tax enforcement regime strengthens it.
The session brought together students, faculty, and researchers for an engaging discussion on the behavioral aspects of taxation and policy design, highlighting the importance of social norms in shaping compliance outcomes.
