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Free keywords:
Compliance, Team decision, Shared liability, Audit, Communication,
Laboratory experiment
Abstract:
Are teams more prone toward non-compliance with laws and regulations than single individuals? We investigate into two key determinants of teams’ compliance behavior: Deciding jointly as a dyad, which allows deferring one’s own moral responsibility onto the team partner, from sharing the liability for gains and losses of collusive behavior. In our laboratory tax compliance experiment, teams are substantially less compliant than individuals are. Shared, as opposed to individual, liability leads to a large drop in compliance. In contrast, whether subjects make their decisions alone or together does hardly influence the overall compliance rate. When coordinating their compliance decision teams predominately discuss the risk of being caught in an audit but hardly moral concerns.
