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The tragedy of the commons in a fishery when relative performance matters

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  • Van Long, Ngo
  • McWhinnie, Stephanie F.

Abstract

This paper presents a simple model of a common access fishery where fishermen care about relative performance as well as absolute profits. Our model captures the idea that status (which depends on relative performance) in a community influences a person's well-being. In our main specification, relative performance depends on the absolute difference in after-tax profits. We show that overharvesting resulting from the tragedy of the commons problem is exacerbated by the desire for higher relative performance, leading to a smaller steady-state fish stock and smaller steady-state profit for all the fishermen. We also consider alternative specifications where status depends on the absolute difference in harvests or relative difference in profits, or where there is heterogeneity in the degree to which status matters, or allowing for the possibility of extinction. In all these specifications, status further reduces the steady-state fish stock. We examine taxes and an individual quota as policy alternatives and find support for using the direct quantity method to implement the socially efficient stock level.

Suggested Citation

  • Van Long, Ngo & McWhinnie, Stephanie F., 2012. "The tragedy of the commons in a fishery when relative performance matters," Ecological Economics, Elsevier, vol. 81(C), pages 140-154.
  • Handle: RePEc:eee:ecolec:v:81:y:2012:i:c:p:140-154 DOI: 10.1016/j.ecolecon.2012.07.002
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Anne-Sarah Chiambretto & Hubert Stahn, 2017. "Voluntary Management of Fisheries under an Uncertain Background Legislative Threat," AMSE Working Papers 1712, Aix-Marseille School of Economics, Marseille, France.
    2. Benchekroun, Hassan & Long, Ngo Van, 2016. "Status concern and the exploitation of common pool renewable resources," Ecological Economics, Elsevier, vol. 125(C), pages 70-82.
    3. Sébastien Rouillon, 2014. "Do Social Status Seeking Behaviors Worsen the Tragedy of the Commons?," Dynamic Games and Applications, Springer, vol. 4(1), pages 73-94, March.
    4. repec:now:jnlsbe:102.00000065t is not listed on IDEAS
    5. Duarte Ferraz Sampaio, Flavia & Ostrensky, Antonio, 2013. "Brazilian environmental legislation as tool to conserve marine ornamental fish," Marine Policy, Elsevier, vol. 42(C), pages 280-285.
    6. Van Long, Ngo, 2016. "The Impacts of Other-Regarding Preferences and Ethical Choice on Environmental Outcomes: A Review of the Literature," Strategic Behavior and the Environment, now publishers, vol. 6(1-2), pages 1-35, December.
    7. Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
    8. repec:spr:dyngam:v:7:y:2017:i:3:d:10.1007_s13235-016-0192-4 is not listed on IDEAS

    More about this item

    Keywords

    Relative profits; Relative performance; Status; Fishery; Tragedy of the commons;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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