Desarrollo y Sociedad
Print version ISSN 0120-3584
RIVERA VIRGUEZ, Liliana. Wildlife fauna trade in Colombia and hidden information: New challenges in the regulation for its sustainable use. Desarro. soc. [online]. 2007, n.60, pp. 47-91. ISSN 0120-3584.
This work describes and analyzes the moral hazard problem that arises from the asymmetric information between environmental regulatory agencies and captive-fauna breeders, the latter group possibly acting illegally in order to improve their benefits. A Principal (environmental regulatory agency) - Agent (captive-fauna breeding farmer) model with asymmetric information is used to analyze transfer schemes the regulatory agency could use to encourage fauna preservation, taking into account both the state of the ecosystem observed by the principal, and the agent's utility function. Results from the simulations suggest that under perfect information, the optimal value of the benefit from a relaxation of regulation is constant and independent from the actions (either licit or illicit) taken by the agent towards the ecosystem. Under asymmetric information, results suggest the optimal level of the benefit from relaxation of regulation depend on the state of natural resources observed after the action (either licit or illicit) associated to the commercialization of fauna.
Keywords : asymmetric information; moral hazard; wildlife fauna production-trade.