Managing Predator–Prey Fisheries With Prey Refuges

Many natural and artificial marine habitats provide refuge for prey species by reducing predation pressure. While such refuges are primarily intended to support biodiversity, their economic implications remain insufficiently understood. This paper develops a tractable two‐species predator–prey model with specialized, strategic harvesting to assess how prey refuges shape the efficiency and sustainability of multispecies fisheries. Prey refuges lower effective fishing pressure on both species. Beyond increasing gains in the prey fishery by mitigating natural predation, they may also generate spillover gains for the predator industry through greater prey availability outside the refuge. The analysis characterizes conditions under which a welfare‐maximizing regulator would implement an artificial refuge to manage predation intensity. Since a refuge provides benefits only through population dynamics, the discount rate is an important determinant of the model. Even when human predation is controlled through optimal harvesting quotas, artificial refuges remain an effective instrument for managing natural predation. Finally, I use data from predator–prey interactions in Lake Victoria fisheries to support the theoretical findings.