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Restricted capacity and rent dissipation in a regulated open access fishery


  • Deacon, Robert T.
  • Finnoff, David
  • Tschirhart, John


A common strategy for limiting the total annual catch in a fishery is to restrict entry and season length. We examine the results of this strategy when entry limitation amounts to a limit on capital, but fishing firms can vary an unrestricted input, and thereby use the restricted input more intensively. Under these regulatory constraints, fishing firms will earn rents that depend on the elasticity of substitution between restricted and unrestricted inputs. Using simulations with data from the Alaskan pollock fishery, rents and season length are shown to depend on fish and variable input prices, sometimes in surprisingly non-monotonic ways.

Suggested Citation

  • Deacon, Robert T. & Finnoff, David & Tschirhart, John, 2011. "Restricted capacity and rent dissipation in a regulated open access fishery," Resource and Energy Economics, Elsevier, vol. 33(2), pages 366-380, May.
  • Handle: RePEc:eee:resene:v:33:y:2011:i:2:p:366-380

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    References listed on IDEAS

    1. Deacon, Robert T, 1994. "Incomplete Ownership, Rent Dissipation, and the Return to Related Investments," Economic Inquiry, Western Economic Association International, vol. 32(4), pages 655-683, October.
    2. Charles Blackorby & R. Robert Russell, 1981. "The Morishima Elasticity of Substitution; Symmetry, Constancy, Separability, and its Relationship to the Hicks and Allen Elasticities," Review of Economic Studies, Oxford University Press, vol. 48(1), pages 147-158.
    3. Campbell, H. F., 1991. "Estimating the elasticity of substitution between restricted and unrestricted inputs in a regulated fishery: A probit approach," Journal of Environmental Economics and Management, Elsevier, vol. 20(3), pages 262-274, May.
    4. Quinn Weninger, 2000. "Buyback programs in commercial fisheries:efficiency versus transfers," Canadian Journal of Economics, Canadian Economics Association, vol. 33(2), pages 394-412, May.
    5. Hilborn, Ray, 2007. "Defining success in fisheries and conflicts in objectives," Marine Policy, Elsevier, vol. 31(2), pages 153-158, March.
    6. Homans, Frances R. & Wilen, James E., 1997. "A Model of Regulated Open Access Resource Use," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 1-21, January.
    7. Deacon, Robert T & Sonstelie, Jon, 1991. "Price Controls and Rent Dissipation with Endogenous Transaction Costs," American Economic Review, American Economic Association, vol. 81(5), pages 1361-1373, December.
    8. H. F. Campbell & R. K. Lindner, 1990. "The Production of Fishing Effort and the Economic Performance of Licence Limitation Programs," Land Economics, University of Wisconsin Press, vol. 66(1), pages 56-66.
    9. Lee G. Anderson, 1985. "Potential Economic Benefits from Gear Restrictions and License Limitation in Fisheries Regulation," Land Economics, University of Wisconsin Press, vol. 64(4), pages 409-418.
    10. H. Scott Gordon, 1954. "The Economic Theory of a Common-Property Resource: The Fishery," Journal of Political Economy, University of Chicago Press, vol. 62, pages 124-124.
    11. Boyce, John R., 2004. "Instrument choice in a fishery," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 183-206, January.
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    Cited by:

    1. Squires, Dale, 2016. "Firm behavior under quantity controls: The theory of virtual quantities," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 70-86.
    2. Matthew N. Reimer & Joshua K. Abbott & James E. Wilen, 2014. "Unraveling the Multiple Margins of Rent Generation from Individual Transferable Quotas," Land Economics, University of Wisconsin Press, vol. 90(3), pages 538-559.
    3. Eli P. Fenichel & Joshua K. Abbott, 2014. "Natural Capital: From Metaphor to Measurement," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(1), pages 1-27.


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