A dynamic simulation model to support reduction in illegal trade within legal wildlife markets.

Sustainable wildlife trade is critical for biodiversity conservation, livelihoods, and food security. Regulatory frameworks are needed to secure these diverse benefits of sustainable wildlife trade. However, regulations limiting trade can backfire, sparking illegal trade if demand is not met by legal trade alone. Assessing how regulations affect wildlife market participants' incentives is key to controlling illegal trade. Although much research has assessed how incentives at both the harvester and consumer ends of markets are affected by regulations, little has been done to understand the incentives of traders (i.e., intermediaries). We built a dynamic simulation model to support reduction in illegal wildlife trade within legal markets by focusing on incentives traders face to trade legal or illegal products. We used an Approximate Bayesian Computation approach to infer illegal trading dynamics and parameters that might be unknown (e.g., price of illegal products). We showcased the utility of the approach with a small-scale fishery case study in Chile, where we disentangled within-year dynamics of legal and illegal trading and found that the majority (∼77%) of traded fish is illegal. We utilized the model to assess the effect of policy interventions to improve the fishery's sustainability and explore the trade-offs between ecological, economic, and social goals. Scenario simulations showed that even significant increases (over 200%) in parameters proxying for policy interventions enabled only moderate improvements in ecological and social sustainability of the fishery at substantial economic cost. These results expose how unbalanced trader incentives are toward trading illegal over legal products in this fishery. Our model provides a novel tool for promoting sustainable wildlife trade in data-limited settings, which explicitly considers traders as critical players in wildlife markets. Sustainable wildlife trade requires incentivizing legal over illegal wildlife trade and consideration of the social, ecological, and economic impacts of interventions.