Mittwoch, 17. Mai 2017, 09:30 - 11:00 iCal

Gastvortrag Annika Mehrmann & Caren Sureth-Sloane

Tax loss offset restrictions, reference dependency, and the evaluation of risky investments: A prospect theory analysis

Besprechungsraum AOW-Psychologie (NIG, 6. Stock)
Universitätsstr. 7, 1010 Wien


Normative model analyses show that symmetrical taxation of gains and losses (complete loss offset) fosters risk-taking under risk aversion and rationality. It is not yet clear whether these effects also occur under bounded rationality. We use a decision model based on prospect theory to analyze the effects of different loss offset patterns on the evaluation of risky investments. We are the first to capture all three main characteristics of prospect theory, i.e., loss aversion, reference dependency and probability weighting in a theoretical tax analysis. We analytically determine ‘neutral loss offset restrictions’. Surprisingly and in contrast to neutral tax regimes identified in prior literature, we find neutral loss offset restriction being hardly affected by the level of taxation and thus relatively robust against tax rate reforms. This new finding is an important step forward to identifying neutral tax systems and evaluating tax reform effects on investment and risk-taking under bounded rationality.

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Prof. Dr. Erich Kirchler


Elisabeth Dorfinger
Fakultät für Psychologie