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Cost sharing and catch sharing

Author

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  • Thorolfur Matthiasson

    (University of Iceland)

Abstract

The model developed in this paper attempts to provide an explanation of the fact that Icelandic vessel owners and Icelandic skippers do not share costs of operation of a vessel. In the model a skipper is contracted to take a fishing vessel to the fishing ground. The skipper is remunerated with a share of the catch, subject to an agreed minimum. Skippers and vessel owners are modelled as if risk neutral. Skippers develop a fishing strategy which is more costly, the higher the value of the potential catch associated with that strategy. Costs that accrue are partly pecuniary (and shareable) and partly skipper-specific (and non- shareable). The conclusions of the paper demonstrate that given the assumptions of our model, a vessel owner should prefer a remuneration contract with a positive revenue share and zero cost share.

Suggested Citation

  • Thorolfur Matthiasson, 1996. "Cost sharing and catch sharing," Development and Comp Systems 9612002, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpdc:9612002
    Note: Type of Document - WordPerfect 3.5 for the Mac; prepared on Macintosh; to print on PostScript; pages: 34; figures: none
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/dev/papers/9612/9612002.pdf
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    References listed on IDEAS

    as
    1. Basu, Kaushik, 1992. "Limited liability and the existence of share tenancy," Journal of Development Economics, Elsevier, vol. 38(1), pages 203-220, January.
    2. Stiglitz, J.E., 1988. "Sharecropping," Papers 11, Princeton, Woodrow Wilson School - Discussion Paper.
    3. Sutinen, J G, 1979. "Fishermen's Remuneration Systems and Implications for Fisheries Development," Scottish Journal of Political Economy, Scottish Economic Society, vol. 26(2), pages 147-162, June.
    4. Earl O. Heady, 1947. "Economics of Farm Leasing Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(3), pages 659-678.
    5. Avishay Braverman & Joseph E. Stiglitz, 1986. "Cost-Sharing Arrangements under Sharecropping: Moral Hazard, Incentive Flexibility, and Risk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(3), pages 642-652.
    6. Lee G. Anderson, 1982. "The Share System in Open-Access and Optimally Regulated Fisheries," Land Economics, University of Wisconsin Press, vol. 58(4), pages 435-449.
    7. Dupont, D.P., 1993. "Price Uncertainty,Expectations Formation and Fishers' Allocation Choice," Working Papers 1993-1, Brock University, Department of Economics.
    8. Thorolfur Matthiasson, 1997. "Fixed wage or share: Contingent contract renewal and skipper motivation," Labor and Demography 9702002, University Library of Munich, Germany.
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    Cited by:

    1. Nguyen, Quang & Leung, PingSun, 2009. "Choice of Remuneration Regime in Fisheries: The Case of Hawaii’s Longline Fisheries," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(3), pages 1-20, December.
    2. César Salazar Espinoza, 2015. "Share Contract Choices and Economic Performance: Empirical Evidence from the Artisanal Fisheries Sector in Chile," Marine Resource Economics, University of Chicago Press, vol. 30(1), pages 71-95.
    3. McConnell, Kenneth E. & Price, Michael, 2006. "The lay system in commercial fisheries: Origin and implications," Journal of Environmental Economics and Management, Elsevier, vol. 51(3), pages 295-307, May.
    4. Thorolfur Matthiasson, 1997. "Fixed wage or share: Contingent contract renewal and skipper motivation," Labor and Demography 9702002, University Library of Munich, Germany.

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    More about this item

    Keywords

    Cost sharing; remuneration systems; fishing;
    All these keywords.

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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