Why evasion is not recommended? a game theory model

Abstract

The decision about tax declaration is a decision under uncertainty. The failure to report one´s full income to the government does not induce automatically to a penalty, it takes time, investigation, and extra costs. In this project, we are considering a simple model where this decision is the only one with which the taxpayer is concerned. So, we showed the strategies that the government can apply to avoid tax evasion.