Work

Using Game Theory to Analyze Strategic Tax Avoidance and Evasion Behaviors among Corporations and Individuals

Year: 2025

Type: article

Abstract: This study applies game theory to analyze strategic tax avoidance and evasion behaviors among corporations and individuals, emphasizing decision-making within regulated environments. Drawing on empirical data from tax compliance reports covering North America, Europe, Asia-Pacific, the Middle East, and Latin America between 2020 and 2024, the research employs a mixed-method approach. Quantitative models such as the Prisoner’s Dilemma and Nash Equilibrium are combined with regression, chi-square, and time-series analyses to evaluate compliance behavior and economic outcomes. Results show a strong negative correlation (-0.74) between tax evasion and economic growth, and a positive Pearson coefficient (0.75) linking corporate profitability with aggressive avoidance strategies. Compliance disparities are evident, with corporations achieving higher rates (68%) than individuals (54%), reflecting structured tax planning. Policy simulations indicate that every 1% increase in audit frequency raises compliance by 0.5%. These findings highlight the value of digital monitoring, international cooperation, and balanced deterrent-incentive mechanisms in mitigating tax avoidance and safeguarding revenue sustainability.

Source: Journal of UTEC Engineering Management

DOI: 10.3126/juem.v3i1.84917

Authors: Mbonigaba Celestin, M. Vasuki, A. Dinesh Kumar, Paul Johnson Asamoah

Institutions: Bharathidasan University, Ghana Meteorological Agency, Ghana Standards Authority

Language: English

Topic: Taxation and Compliance Studies

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: diamond

OpenAlex ID: W4414613807

FWCI:

Cites:

Cited by:

Related to: