Working Paper: NBER ID: w28610
Authors: Andres Gonzalez-Lira; Ahmed Mushfiq Mobarak
Abstract: Attempts to curb undesired behavior through regulation gets complicated when agents can adapt to circumvent enforcement. We test a model of enforcement with learning and adaptation, by auditing vendors selling illegal fish in Chile in a randomized controlled trial, and tracking them daily using mystery shoppers. Conducting audits on a predictable schedule and (counter-intuitively) at high frequency is less effective, as agents learn to take advantage of loopholes. A consumer information campaign proves to be almost as cost-effective and curbing illegal sales, and obviates the need for complex monitoring and policing. The Chilean government subsequently chooses to scale up this campaign.
Keywords: regulation; enforcement; consumer information; illegal fishing; randomized controlled trial
JEL Codes: K42; L51; O1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increasing the frequency of audits (M42) | Increased ability of vendors to adapt strategies to hide illegal fish sales (Q22) |
| Increased unpredictability in monitoring visits (C90) | Reduction in illegal fish sales (K42) |
| Consumer information campaigns (D18) | Reduction in illegal fish sales (K42) |