Slippery Fish: Enforcing Regulation when Agents Learn and Adapt

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

Slippery Fish: Enforcing Regulation when Agents Learn and Adapt

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

Dementia in Latin America : paving the way towards a regional action plan

Regional challenges faced by Latin American and Caribbean countries (LACs) to fight dementia, such as heterogeneity, diversity, political instabilities, and socioeconomic disparities, can be addressed more effectively grounded in a collaborative setting based on the open exchange of knowledge. In this work, the Latin American and Caribbean Consortium on Dementia (LAC-CD) proposes an agenda for integration to deliver a Knowledge to Action Framework (KtAF). First, we summarize evidence-based strategies (epidemiology, genetics, biomarkers, clinical trials, nonpharmacological interventions, networking and translational research) and align them to current global strategies to translate regional knowledge into actions with transformative power. Then, by characterizing genetic isolates, admixture in populations, environmental factors, and barriers to effective interventions and mapping these to the above challenges, we provide the basic mosaics of knowledge that will pave the way towards a KtAF. We describe strategies supporting the knowledge creation stage that underpins the translational impact of KtAF

Essays on Markets and Institutions

This dissertation studies how agents and firms interplay under different market institutions. In the first two chapters, co-authored with Rodrigo Carril and Michael Walker, we study the implications of policies oriented to intensify competition for procurement contracts. Conceptually, opening contracts up to bids by more participants leads to lower acquisition costs. However, expanding the set of bidders hinders buyers' control over the quality of prospective contractors, potentially exacerbating adverse selection on non-contractible quality dimensions. We study this trade-off in the context of procurement by the U.S. Department of Defense. Our empirical strategy leverages regulation that mandates agencies to publicize contract opportunities whose value is expected to exceed a certain threshold. We find that advertising contract solicitations increases competition and leads to a different pool of selected vendors who, on average, offer lower prices. However, it also worsens post-award performance, resulting in more cost overruns and delays. This negative effect on post-award performance is driven by goods and services that are relatively complex, highlighting the role of contract incompleteness. To further study the scope of this tension, we develop and estimate a model in which the buyer chooses the extent of competition, and the invited sellers decide on auction participation and bidding. We estimate sellers' cost and ex-post quality distributions, as well as buyers' preference parameters over contract outcomes. Simulating equilibrium conditions under counterfactual settings, we benchmark the current regulation design with complexity-tailored publicity requirements, and find that adjustments to publicity requirements could provide savings of 2 percent of spending, or $104 million annually. One of the main roles of the government involves enacting and enforcing regulation aimed at curbing the undesired behavior of agents. In the third chapter, co-authored with Mushfiq Mobarak, we study the consequences of deploying enforcement activities over illegal activities in local markets in Chile. The paper grapples with a key real-world feature that is that regulated agents adapt to circumvent enforcement. We present and 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. Leveraging experimental variation on the frequency and predictability of enforcement, we can test the model's predictions and find that 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

Essays on Markets and Institutions

This dissertation studies how agents and firms interplay under different market institutions. In the first two chapters, co-authored with Rodrigo Carril and Michael Walker, we study the implications of policies oriented to intensify competition for procurement contracts. Conceptually, opening contracts up to bids by more participants leads to lower acquisition costs. However, expanding the set of bidders hinders buyers' control over the quality of prospective contractors, potentially exacerbating adverse selection on non-contractible quality dimensions. We study this trade-off in the context of procurement by the U.S. Department of Defense. Our empirical strategy leverages regulation that mandates agencies to publicize contract opportunities whose value is expected to exceed a certain threshold. We find that advertising contract solicitations increases competition and leads to a different pool of selected vendors who, on average, offer lower prices. However, it also worsens post-award performance, resulting in more cost overruns and delays. This negative effect on post-award performance is driven by goods and services that are relatively complex, highlighting the role of contract incompleteness. To further study the scope of this tension, we develop and estimate a model in which the buyer chooses the extent of competition, and the invited sellers decide on auction participation and bidding. We estimate sellers' cost and ex-post quality distributions, as well as buyers' preference parameters over contract outcomes. Simulating equilibrium conditions under counterfactual settings, we benchmark the current regulation design with complexity-tailored publicity requirements, and find that adjustments to publicity requirements could provide savings of 2 percent of spending, or $104 million annually. One of the main roles of the government involves enacting and enforcing regulation aimed at curbing the undesired behavior of agents. In the third chapter, co-authored with Mushfiq Mobarak, we study the consequences of deploying enforcement activities over illegal activities in local markets in Chile. The paper grapples with a key real-world feature that is that regulated agents adapt to circumvent enforcement. We present and 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. Leveraging experimental variation on the frequency and predictability of enforcement, we can test the model's predictions and find that 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

Slippery Fish: Enforcing Regulation under Subversive Adaptation

Attempts to curb illegal activity through regulation gets complicated when agents can adapt to circumvent enforcement. Economic theory suggests that conducting audits on a predictable schedule, and (counter-intuitively) at high frequency, can undermine the effectiveness of audits. We conduct a large-scale randomized controlled trial to test these ideas by auditing Chilean vendors selling illegal fish. Vendors circumvent penalties through hidden sales and other means, which we track using mystery shoppers. Instituting monitoring visits on an unpredictable schedule is more effective at reducing illegal sales. High frequency monitoring to prevent displacement across weekdays to other markets backfires, because targeted agents learn faster and cheat more effectively. Sophisticated policy design is therefore crucial for determining the sustained, longer-term effects of enforcement. A simpler demand-side information campaign generates two-thirds of the gains compared to the most effective monitoring scheme, it is easier for the government to implement, and is almost as cost-effective. The government subsequently chose to scale up that simpler strategy

Valuing Technology Complementarities: Rooftop Solar and Energy Storage

Product complementarities can shape market patterns, influencing the demand for related products and their accessories. This study examines complementarities in the demand for rooftop solar and an accessory, battery energy storage. Using nationwide administrative data, we estimate a dynamic nested-logit model of solar and storage adoption. We quantify the demand complementarity between solar and storage, and find that if storage was not available, 20% of households who coadopt solar and storage would not adopt anything. We find that the demand for solar and storage bundles increases with power outages, with a larger effect in California