Experimental Design Details
Participants are matched into groups of four (two green workers and two orange workers). Green workers receive a higher gross income than orange workers. Green workers are supposed to pay a tax of 60% and orange workers of 20%, such that post-tax incomes are equal. However, green workers can work on a calculation task to adjust their tax rate. For each correct calculation, they reduce their tax rate by 3 percentage points. There is a loophole in the calculation task, which allows workers to decrease their tax rate strongly without making any calculations.
Spectators are shown the instructions of the workers and they can try out the task as well. Afterward, they are asked whether they would like to close the loophole in a future session. In the ex-post treatment, they are asked instead whether they would like to sanction workers who exploited the loophole. Moreover, they are asked how appropriate they consider the exploitation of the loophole.
Worker sessions for the ex-post decision are conducted prior to the spectator experiments, while worker sessions for the ex-ante decision take place after the experiment. The choices made by randomly selected spectators are then implemented in these worker sessions.
In a post-experimental questionnaire, we elicit the motives for spectator decisions, general political attitudes, and background characteristics.
For the experimental interventions, we test the following hypotheses (relative to the baseline treatment):
H1: The Effort treatment increases (a) the appropriateness of the loophole and (b) individuals are less likely to close the loophole.
H2: In the Non-clever treatment, individuals are more likely to close the loophole. Regarding the appropriateness of exploiting the loopholes, there may be mixed effects since the treatment may also shift the perception of whether the loophole is intended or not.
H3: The Inefficiency treatment increases (a) the appropriateness of the loophole and (b) individuals are less likely to close the loophole.
H4: In the ex-post treatment, we expect the share of people wanting to sanction loophole exploiters to be lower than the share of people wanting to close the loophole.
We will estimate heterogeneous treatment effects by political affiliation, voting behavior in previous presidential elections, income, education, gender, and age.
We are interested in heterogeneous treatment effects by political affiliation, however, Prolific has a substantially higher share of Democratic participants. Therefore, we will use quotas to target the vote share of Donald Trump in the presidential election 2020.
We will do robustness checks by excluding participants who answered the comprehension questions incorrectly on the first try.