NSF Org:	SES Division of Social and Economic Sciences
Recipient:	CALIFORNIA INSTITUTE OF TECHNOLOGY
Initial Amendment Date:	July 16, 1987
Latest Amendment Date:	July 16, 1987
Award Number:	8710578
Award Instrument:	Standard Grant
Program Manager:	Lisa Martin SES  Division of Social and Economic Sciences SBE  Directorate for Social, Behavioral and Economic Sciences
Start Date:	August 1, 1987
End Date:	July 31, 1989 (Estimated)
Total Intended Award Amount:	$78,705.00
Total Awarded Amount to Date:	$78,705.00
Funds Obligated to Date:	FY 1987 = $78,705.00
History of Investigator:	Jennifer Reinganum (Principal Investigator) jennifer.f.reinganum@vanderbilt.edu Louis Wilde (Co-Principal Investigator)
Recipient Sponsored Research Office:	California Institute of Technology 1200 E CALIFORNIA BLVD PASADENA CA  US  91125-0001 (626)395-6219
Sponsor Congressional District:	28
Primary Place of Performance:	DATA NOT AVAILABLE
Primary Place of Performance Congressional District:
Unique Entity Identifier (UEI):	U2JMKHNS5TG4
Parent UEI:
NSF Program(s):	Economics, LSS-Law And Social Sciences
Primary Program Source:
Program Reference Code(s):
Program Element Code(s):	132000, 137200
Award Agency Code:	4900
Fund Agency Code:	4900
Assistance Listing Number(s):	47.075

ABSTRACT

Economic considerations have an important influence on the outcomes of two-party bargaining situations which are subject to enforcement by law. Drs. Reiganum and Wilde seek to extend their earlier work under NSF support, which focused on the conditions that engender income tax compliance, to a variety of problems involving bargaining situations in the areas of tax compliance, plea bargaining, and regulatory compliance. They make a series of different assumptions concerning human behavior and then examine and compare the outcomes of the situations which follow from these different assumptions as well as the degree to which these outcomes can be predicted. The models they formulate to study these problems use analytic techniques from economic theory and the theory of incomplete information. The research of Drs. Reiganum and Wilde addresses several fundamental questions regarding compliance in the face of asymmetric information: To what extent does prosecutorial discretion affect bargaining between prosecutors (as agents of society) and defendants over reduced sentences in exchange for guilty pleas? How does uncertainty on the part of taxpayers affect their compliance behavior, and how does the incorporation of third-party "expert advisors" affect compliance and Internal Revenue Service auditing? How does a firm undertaking toxicity testing decide whether or not to apply to the Environmental Protection Agency (EPA) for permission to manufacture the new chemical and how, in turn, does the EPA choose to accept the firm's application or, alternatively, to conduct a costly audit of the firm's test results? The rigorous theoretical analysis of Drs. Reiganum and Wilde promises to further illuminate the causes and underlying dynamics of compliance and thus is of substantial scientific significance.

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