Research Article
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Year 2018, Volume: 18 Issue: 2, 195 - 215, 01.04.2018
https://doi.org/10.21121/eab.2018237350

Abstract

References

  • Abreu, D. And Rubinstein, A. (1988) “The Structure of Nash Equilibrium in Repeated Games with Finite Automata” Econometrica, 56(6): 1259-1281.
  • Arrow, K. J. and Honkapohja, S. (1985). ""What Is Game Theory Trying to Accomplish?" Frontiers of Economics, Oxford.
  • Fukofuka, P. (2013) “The Contextual Framework of Corporate Income Tax Evasion” Journal of Accounting And Taxation, 5(2): 27-37.
  • Hart, S. (2006) “Robert Aumann’s Game and Economic Theory” Scand. J. of Economics, 108(2): 185–211, DOI: 10.1111/j.1467-9442.2006.00448.x.
  • Hinriches, H.H. (1969) “Game Theory and the Rational Tax Evader” Journal of Financial Research Center Conferences, 19: 123-132.
  • Kalai, E., Samet, D. and Stanford, W. (1988) “A Note on Reactive Equilibria in the Discounted Prisoner's Dilemma and Associated Games” International Journal of Game Theory, 17(3): 177-186.
  • Luce, R. D. and Raiffa H. (1957) “Games and Decisions Introduction and Critical Survey”, Reprinted edition, New York.
  • Matsushima, H. (2014) “Interlinkage and Generous Tit-for-Tat Strategy” Japanese Economic Review, 65: 116–121. doi:10.1111/jere.12014.
  • Megiddo, N. (1994), “Essays in Game Theory in Honor of Michael Maschler”, Springer-Verlag, New York.
  • Nash, J. F. (1950) "Equilibrium Points in n-Person Games" Proceedings of the National Academy of Sciences, 36: 48- 49.
  • Nash, J. F. (1951) “Non-Cooperative Games” Annals of Mathematics, 54: 286–295.
  • Nayyar S. (2009) “Essays On Repeated Games”, PhD Dissertation, Princeton University. WEB REFERENCES
  • Knight, V. (2017), “Finitely Repeated Games”, http:// Vknight/Year_3_game_theory_course/ content/ chapter_09_Finitely_Repeated_Games, (16.06.2017)
  • MIT OpenCourseWare (2012), “Economic Applications of Game Theory”, http://ocw.mit.edu, (27.07.2017)
  • Hitzig Z., Hoffman M., and Yoeli E. (2013), “Pure Strategy Matrix Form Games and Nash Equilibria”, https://ocw. mit.edu/courses/economics/14-11-insights-fromgame- theory-into-social-behavior-fall-2013/studymaterials/ MIT14_11F13_Pure_strategy.pdf
  • Presidency Of Tax Administration For Large-Scaled Taxpayers, PTALST (2009), “Tax Procedure Law”, http:// www.bmvdb.gov.tr/ozelgeler/2009/vuk/17600.htm , (25.08.2016)
  • TACOM (2016), “Tax Audit Committee 2012-2015 Activity Reports”, http://www.vdk.gov.tr/default.aspx?nsw=dc iSsil8zCRLPP9XnV0K5Q==-H7deC+LxBI8=&nm=1048, (10 August 2016)
  • Tax Inspectors Foundation (2016), “An Example For a Limited Company Audited”, http://www.vmv.org.tr/ Yay%C4%B1n/10, (28.05.2016)
  • TRA Turkish Revenue Administration, (1997), “First Degree Irregularity Fine”, http://www.gib.gov.tr/ node/92122, (25.08.2016)
  • TRA (2016a), “The Number of Active CTPs”, http:// www.gib.gov.tr/fileadmin/user_ upload/VI/20151. htm, (01.08. 2016)
  • TRA (2016b), “Central Government Budget Revenues”, http://www.gib.gov.tr/ fileadmin/user_upload/VI/GBG/ Tablo_22.xls.htm, (08.08.2016)
  • TRA (2007), “Settlement in Resolving Tax Disputes With The Tax Administration”, www.gib.gov.tr/fileadmin/ user_upload/yayinlar/uzlasma.pdf, (28.06.2016)
  • TRA (2016c), “Strategy Development Department 2011- 2015 Activity Reports”, http://www.gib.gov.tr/kurumsal/ stratejik-yonetim/faaliyet-raporlari, (10.05.2016)
  • TRA (2016d), “Special Irregularity Fine”, http://www.gib. gov.tr/node/83111 , (28.08.2016)
  • TRA (1961), “Tax Procedure Law”, http://www.gib.gov. tr/fileadmin/mevzuatek/gerekceler/ VUK/vuk_gerekce. pdf, (19.08.2016)
  • Yavaslar, F.B. (2015), “Surcharges and penalties in tax law. Turkey’s National Report”, www.eatlp.org/ uploads/public/2015/National%20report%20Turkey. pdf, (04.05.2016)

Corporate Tax Payoff in A Game Theory Approach

Year 2018, Volume: 18 Issue: 2, 195 - 215, 01.04.2018
https://doi.org/10.21121/eab.2018237350

Abstract

This article investigates corporate tax payoffs in a repeated game theory approach. An application of mixed strategy infinitely repeated game for corporate tax payoffs is provided with four payment types included under new draft tax procedural law. The Folk Theorem is used to find SPNE of infinitely repeated game strategies. The results demonstrate that: (1) the solution set of zero sum game is linear and that of variable sum game is trapezoidal; (2) Grim-trigger and Tit-for-tat of defection both are not appropriate strategies; (3) in pure and mixed strategy equilibrium, TRA needs high audit rates in order to force CTP to point of indifference; (4) CTP will prefer evading tax indefinitely and if possible request settlement when get caught for evading tax; and (5) the number of qualified tax inspectors and audit rates must be increased to break the courage of CTP evading tax.

References

  • Abreu, D. And Rubinstein, A. (1988) “The Structure of Nash Equilibrium in Repeated Games with Finite Automata” Econometrica, 56(6): 1259-1281.
  • Arrow, K. J. and Honkapohja, S. (1985). ""What Is Game Theory Trying to Accomplish?" Frontiers of Economics, Oxford.
  • Fukofuka, P. (2013) “The Contextual Framework of Corporate Income Tax Evasion” Journal of Accounting And Taxation, 5(2): 27-37.
  • Hart, S. (2006) “Robert Aumann’s Game and Economic Theory” Scand. J. of Economics, 108(2): 185–211, DOI: 10.1111/j.1467-9442.2006.00448.x.
  • Hinriches, H.H. (1969) “Game Theory and the Rational Tax Evader” Journal of Financial Research Center Conferences, 19: 123-132.
  • Kalai, E., Samet, D. and Stanford, W. (1988) “A Note on Reactive Equilibria in the Discounted Prisoner's Dilemma and Associated Games” International Journal of Game Theory, 17(3): 177-186.
  • Luce, R. D. and Raiffa H. (1957) “Games and Decisions Introduction and Critical Survey”, Reprinted edition, New York.
  • Matsushima, H. (2014) “Interlinkage and Generous Tit-for-Tat Strategy” Japanese Economic Review, 65: 116–121. doi:10.1111/jere.12014.
  • Megiddo, N. (1994), “Essays in Game Theory in Honor of Michael Maschler”, Springer-Verlag, New York.
  • Nash, J. F. (1950) "Equilibrium Points in n-Person Games" Proceedings of the National Academy of Sciences, 36: 48- 49.
  • Nash, J. F. (1951) “Non-Cooperative Games” Annals of Mathematics, 54: 286–295.
  • Nayyar S. (2009) “Essays On Repeated Games”, PhD Dissertation, Princeton University. WEB REFERENCES
  • Knight, V. (2017), “Finitely Repeated Games”, http:// Vknight/Year_3_game_theory_course/ content/ chapter_09_Finitely_Repeated_Games, (16.06.2017)
  • MIT OpenCourseWare (2012), “Economic Applications of Game Theory”, http://ocw.mit.edu, (27.07.2017)
  • Hitzig Z., Hoffman M., and Yoeli E. (2013), “Pure Strategy Matrix Form Games and Nash Equilibria”, https://ocw. mit.edu/courses/economics/14-11-insights-fromgame- theory-into-social-behavior-fall-2013/studymaterials/ MIT14_11F13_Pure_strategy.pdf
  • Presidency Of Tax Administration For Large-Scaled Taxpayers, PTALST (2009), “Tax Procedure Law”, http:// www.bmvdb.gov.tr/ozelgeler/2009/vuk/17600.htm , (25.08.2016)
  • TACOM (2016), “Tax Audit Committee 2012-2015 Activity Reports”, http://www.vdk.gov.tr/default.aspx?nsw=dc iSsil8zCRLPP9XnV0K5Q==-H7deC+LxBI8=&nm=1048, (10 August 2016)
  • Tax Inspectors Foundation (2016), “An Example For a Limited Company Audited”, http://www.vmv.org.tr/ Yay%C4%B1n/10, (28.05.2016)
  • TRA Turkish Revenue Administration, (1997), “First Degree Irregularity Fine”, http://www.gib.gov.tr/ node/92122, (25.08.2016)
  • TRA (2016a), “The Number of Active CTPs”, http:// www.gib.gov.tr/fileadmin/user_ upload/VI/20151. htm, (01.08. 2016)
  • TRA (2016b), “Central Government Budget Revenues”, http://www.gib.gov.tr/ fileadmin/user_upload/VI/GBG/ Tablo_22.xls.htm, (08.08.2016)
  • TRA (2007), “Settlement in Resolving Tax Disputes With The Tax Administration”, www.gib.gov.tr/fileadmin/ user_upload/yayinlar/uzlasma.pdf, (28.06.2016)
  • TRA (2016c), “Strategy Development Department 2011- 2015 Activity Reports”, http://www.gib.gov.tr/kurumsal/ stratejik-yonetim/faaliyet-raporlari, (10.05.2016)
  • TRA (2016d), “Special Irregularity Fine”, http://www.gib. gov.tr/node/83111 , (28.08.2016)
  • TRA (1961), “Tax Procedure Law”, http://www.gib.gov. tr/fileadmin/mevzuatek/gerekceler/ VUK/vuk_gerekce. pdf, (19.08.2016)
  • Yavaslar, F.B. (2015), “Surcharges and penalties in tax law. Turkey’s National Report”, www.eatlp.org/ uploads/public/2015/National%20report%20Turkey. pdf, (04.05.2016)
There are 26 citations in total.

Details

Primary Language English
Subjects Economics
Journal Section Research Article
Authors

Ersin Kıral 0000-0001-6040-1795

Can Mavruk This is me 0000-0002-4084-7447

Publication Date April 1, 2018
Published in Issue Year 2018 Volume: 18 Issue: 2

Cite

APA Kıral, E., & Mavruk, C. (2018). Corporate Tax Payoff in A Game Theory Approach. Ege Academic Review, 18(2), 195-215. https://doi.org/10.21121/eab.2018237350
AMA Kıral E, Mavruk C. Corporate Tax Payoff in A Game Theory Approach. ear. April 2018;18(2):195-215. doi:10.21121/eab.2018237350
Chicago Kıral, Ersin, and Can Mavruk. “Corporate Tax Payoff in A Game Theory Approach”. Ege Academic Review 18, no. 2 (April 2018): 195-215. https://doi.org/10.21121/eab.2018237350.
EndNote Kıral E, Mavruk C (April 1, 2018) Corporate Tax Payoff in A Game Theory Approach. Ege Academic Review 18 2 195–215.
IEEE E. Kıral and C. Mavruk, “Corporate Tax Payoff in A Game Theory Approach”, ear, vol. 18, no. 2, pp. 195–215, 2018, doi: 10.21121/eab.2018237350.
ISNAD Kıral, Ersin - Mavruk, Can. “Corporate Tax Payoff in A Game Theory Approach”. Ege Academic Review 18/2 (April 2018), 195-215. https://doi.org/10.21121/eab.2018237350.
JAMA Kıral E, Mavruk C. Corporate Tax Payoff in A Game Theory Approach. ear. 2018;18:195–215.
MLA Kıral, Ersin and Can Mavruk. “Corporate Tax Payoff in A Game Theory Approach”. Ege Academic Review, vol. 18, no. 2, 2018, pp. 195-1, doi:10.21121/eab.2018237350.
Vancouver Kıral E, Mavruk C. Corporate Tax Payoff in A Game Theory Approach. ear. 2018;18(2):195-21.