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Adjustment Cost and Supply Response in a Fishery: A Dynamic Revenue Function

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Author Info
Frank Asche

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Abstract

In industries where firms can adjust product mix in response to price changes, the process can be delayed by adjustment costs. An example is fishermen who change fishing grounds to target different species. If adjustment costs are sufficiently large, this may hamper the fishermen’s response so that regulatory tools that are not efficient in the long run are useful in the short run. Moreover, adjustment costs can influence the choice of species targeted. In this paper dynamic supply equations are specified using a revenue function approach. Different hypotheses about the dynamics of the supply equations are tested for Norwegian trawlers.

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File URL: http://le.uwpress.org/cgi/reprint/85/1/201
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Publisher Info
Article provided by University of Wisconsin Press in its journal Land Economics.

Volume (Year): 85 (2009)
Issue (Month): 1 ()
Pages: 201-215
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Handle: RePEc:uwp:landec:v:85:y:2009:i:1:p:201-215

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Web page: http://le.uwpress.org/

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Related research
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Find related papers by JEL classification:
Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior

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This page was last updated on 2009-11-22.

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