The Study Of Tax Compliance Based On Prospect Theory

Prospect Theory is the most important base of the modern behavioral finance theory. It modifies the hypothesis of rational and selfish agent in traditional economics, integrating psychological research achievements with economics. Prospect Theory gives a better explanation for decision behaviors under uncertainty and provides the basis for behavioral finance. It makes the research about the behavior of the people more close to the reality. It gives the answer of a lot of field baffling problems. At the same time, it is for human psychological law quest guide us go to this theoretical application other economic field.This paper leads Prospect Theory into the field of tax compliance, in order to study the factors for influencing tax compliance, so make conclusion. This paper uses the way of quantitative analysis and qualitative analysis. Prospect Theory is a new angle to study the decision-making behavior of tax compliance. It has not only explained the tax baffling problems under Expected Utility Theory, but also offered a new way for the following research.