Publication Date: August 2018
Revision Date: March 2021
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: Enforcement, Regulation, Law and Economics, Fisheries
JEL Classification Codes: K42, O1, L51CFDP 2143