Cost sharing and catch sharing
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.
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- 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 147-62, June.
- 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.
- Thorolfur Matthiasson, 1997. "Fixed wage or share: Contingent contract renewal and skipper motivation," Labor and Demography 9702002, EconWPA.
- Dupont, D.P., 1993. "Price Uncertainty,Expectations Formation and Fishers' Allocation Choice," Working Papers 1993-1, Brock University, Department of Economics.
- Stiglitz, J.E., 1988. "Sharecropping," Papers 11, Princeton, Woodrow Wilson School - Discussion Paper.
- Basu, Kaushik, 1992. "Limited liability and the existence of share tenancy," Journal of Development Economics, Elsevier, vol. 38(1), pages 203-220, January.
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