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Field
Last Published
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Before
April 14, 2026 09:36 AM
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After
April 19, 2026 11:07 AM
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Field
Intervention (Public)
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Before
Participants take part in a laboratory experiment in which they repeatedly allocate income between a formal, taxed deposit account and an informal, untaxed cash holding over 15 rounds. In each round, participants must also finance a mandatory expenditure using deposits, cash, or a combination of both. The experiment includes three treatments: a baseline with no shock, an unanticipated shock, and a pre-announced shock. In the two shock treatments, a policy intervention is introduced after round 7 that invalidates accumulated cash unless it is converted into the formal system. The amount converted determines the audit probability during the subsequent three rounds (rounds 8–10). From round 11 onward, the audit probability returns to its baseline level.
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After
Participants take part in a laboratory experiment in which they repeatedly allocate income between a formal, taxed deposit account and an informal, untaxed cash holding over 17 rounds. In each round, participants must also finance a mandatory expenditure using deposits, cash, or a combination of both. The experiment includes three treatments: a baseline with no shock, an unanticipated shock, and a pre-announced shock. In the two shock treatments, a policy intervention is introduced after round 7 that invalidates accumulated cash unless it is converted into the formal system. The amount converted determines the audit probability during the subsequent three rounds (rounds 8–10). From round 11 onward, the audit probability returns to its baseline level.
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Field
Primary Outcomes (End Points)
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Before
Deposit allocation per round: the amount allocated to the formal deposit account in each round.
Conversion amount: the amount of accumulated cash converted into the formal system at the post-round-7 conversion stage in the shock treatments.
Post-shock deposit allocation: deposit allocation in rounds 8–15, with particular focus on persistence in rounds 11–15 after audit probabilities return to baseline.
Expenditure composition: the share of the mandatory expenditure financed from deposits rather than cash in each round.
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After
Deposit allocation per round: the amount allocated to the formal deposit account in each round.
Conversion amount: the amount of accumulated cash converted into the formal system at the post-round-7 conversion stage in the shock treatments.
Post-shock deposit allocation: deposit allocation in rounds 8–17, with particular focus on persistence in rounds 11–17 after audit probabilities return to baseline.
Expenditure composition: the share of the mandatory expenditure financed from deposits rather than cash in each round.
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Experimental Design (Public)
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Before
This study is a laboratory experiment with three treatments. In all treatments, participants complete 15 rounds in which they allocate income between a formal, taxed deposit account and an informal, untaxed cash holding. In each round, they must also finance a mandatory expenditure using deposits, cash, or a combination of both. At the end of every round, informal cash holdings are subject to audit with a fixed probability, and detected cash holdings are taxed with a penalty.
In the baseline treatment, no policy shock occurs and the audit probability remains constant throughout the experiment. In the two shock treatments, a one-time intervention occurs after round 7: accumulated cash becomes invalid unless it is converted into the formal system. The amount converted determines the audit probability during rounds 8–10, during which both converted amounts and any undeclared cash holdings remain subject to audit. One shock treatment is unanticipated, while the other is announced in advance at the start of the experiment. Audit probabilities return to baseline in rounds 11–15.
The design allows comparison of allocation, conversion, and expenditure behaviour across treatments and across phases of the experiment.
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After
This study is a laboratory experiment with three treatments. In all treatments, participants complete 17 rounds in which they allocate income between a formal, taxed deposit account and an informal, untaxed cash holding. In each round, they must also finance a mandatory expenditure using deposits, cash, or a combination of both. At the end of every round, informal cash holdings are subject to audit with a fixed probability, and detected cash holdings are taxed with a penalty.
In the baseline treatment, no policy shock occurs and the audit probability remains constant throughout the experiment. In the two shock treatments, a one-time intervention occurs after round 7: accumulated cash becomes invalid unless it is converted into the formal system. The amount converted determines the audit probability during rounds 8–10, during which both converted amounts and any undeclared cash holdings remain subject to audit. One shock treatment is unanticipated, while the other is announced in advance at the start of the experiment. Audit probabilities return to baseline in rounds 11–17.
The design allows comparison of allocation, conversion, and expenditure behaviour across treatments and across phases of the experiment.
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Field
Sample size (or number of clusters) by treatment arms
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Before
240- 270 individuals
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After
80-90 per treatment with a total of 240- 270 individuals
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Field
Intervention (Hidden)
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Before
The study is a laboratory experiment implemented using oTree and consists of 15 rounds. In each round, participants receive an endowment of 100 Experimental Currency Units (ECU) and decide how much to allocate between a formal deposit account and an informal cash holding. Deposits are subject to a proportional tax, while cash holdings are untaxed but may be detected through audit. Participants must also finance a mandatory expenditure of 40 ECU in each round using deposits, cash, or a combination of both. Expenditure financed from cash is subject to a friction cost, capturing the relative difficulty of using cash compared to digital payment methods.
In the baseline treatment, no policy shock occurs and the audit probability remains constant across all rounds. In the two shock treatments, a one-time intervention is introduced after round 7. At this stage, all accumulated cash holdings are designated as “old cash” and become invalid unless converted into the formal deposit account. Participants choose how much of this accumulated cash to convert, and any unconverted amount is permanently destroyed.
The amount converted determines the audit probability during rounds 8–10 according to a tiered audit schedule, with higher levels of conversion leading to higher audit probabilities. During this enforcement phase, both converted cash and any informal cash holdings remain subject to audit risk. If an audit occurs, unpaid taxes and penalties are applied to undeclared amounts according to the experimental rules.
From round 11 onward, the audit probability returns to its baseline level, and no further policy interventions occur. This final phase allows the measurement of persistence in behavioural responses after enforcement intensity normalises.
In addition, incentivised tasks and survey-based measures are administered at the end of the experiment to elicit individual behavioural traits, including risk preferences, ambiguity aversion, loss aversion, and tax morale, which are incorporated as heterogeneity variables in the analysis.
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After
The study is a laboratory experiment implemented using oTree and consists of 17 rounds. In each round, participants receive an endowment of 100 Experimental Currency Units (ECU) and decide how much to allocate between a formal deposit account and an informal cash holding. Deposits are subject to a proportional tax, while cash holdings are untaxed but may be detected through audit. Participants must also finance a mandatory expenditure of 40 ECU in each round using deposits, cash, or a combination of both. Expenditure financed from cash is subject to a friction cost, capturing the relative difficulty of using cash compared to digital payment methods.
In the baseline treatment, no policy shock occurs and the audit probability remains constant across all rounds. In the two shock treatments, a one-time intervention is introduced after round 7. At this stage, all accumulated cash holdings are designated as “old cash” and become invalid unless converted into the formal deposit account. Participants choose how much of this accumulated cash to convert, and any unconverted amount is permanently destroyed.
The amount converted determines the audit probability during rounds 8–10 according to a tiered audit schedule, with higher levels of conversion leading to higher audit probabilities. During this enforcement phase, both converted old cash and any informal cash holdings remain subject to audit risk. If an audit occurs, unpaid taxes and penalties are applied to undeclared amounts according to the experimental rules.
From round 11 onward, the audit probability returns to its baseline level, and no further policy interventions occur. This final phase allows the measurement of persistence in behavioural responses after enforcement intensity normalises.
In addition, incentivised tasks and survey-based measures are administered at the end of the experiment to elicit individual behavioural traits, including risk preferences, ambiguity aversion, loss aversion, and tax morale, which are incorporated as heterogeneity variables in the analysis.
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Field
Secondary Outcomes (End Points)
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Before
Cash holdings carried forward across rounds.
Audit bracket reached at the conversion stage, as determined by the amount converted.
Accumulated wealth at the end of the experiment.
Round-by-round dynamics of compliance after the shock, including the decay of treatment differences in rounds 11–15.
Heterogeneous treatment effects by behavioural heterogeneity variables, including risk preferences, loss aversion, lying aversion, and tax morale.
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After
Cash holdings carried forward across rounds.
Audit bracket reached at the conversion stage, as determined by the amount converted.
Accumulated wealth at the end of the experiment.
Round-by-round dynamics of compliance after the shock, including the decay of treatment differences in rounds 11–17.
Heterogeneous treatment effects by behavioural heterogeneity variables, including risk preferences, loss aversion, lying aversion, and tax morale.
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