The detection of fraudulent behavior is often hampered by anticipation of inspections. We develop a method to detect fraud that exploits anticipatory behavior and apply it to violations of mesh size regulations in the fishing industry. Next to fishing quota, regulation of minimum mesh size of fishing nets should limit overexploitation of fish stocks. Violation of the regulation leaves a fingerprint: it alters the composition of the catch by size. Illegally small mesh size increases the catch of small fish, but does not affect the catch of large fish. Using detailed catch data and quasi-random variation in presence of the inspection vessel, we test for the presence of this fingerprint in the catch. We find that presence of the inspection vessel leads to a substantial increase in the catch of small fish; it has no identifiable effect on the catch of large fish. Our results suggest that use of illegally small mesh size is widespread and results in large-scale destruction of natural resources.
(with Stephen Kastoryano and Jean van Haperen)