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Quota Setting and Enforcement Choice in a Shared Fishery

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  • Aaron Hatcher

    ()

  • Linda Nøstbakken

    ()

Abstract

We model the exploitation of an international (shared stock) fishery which is managed using national quotas determined as agreed shares of an annual total allowable catch (TAC). Given its annual quota, each country employs enforcement effort in order to maximise national social benefits while securing an acceptable degree of quota compliance by its fishing fleet. We examine the determination of the TAC which maximises the present value of the fishery, given the agreed quota shares and each country’s harvest and enforcement best-response functions. Inefficiency may derive not only from non-optimal TAC shares but also from the countries’ implicit preferences for compliance. We illustrate these findings with a set of numerical simulations. Finally, we consider the incentives for countries to bid up the TAC during international negotiations. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Aaron Hatcher & Linda Nøstbakken, 2015. "Quota Setting and Enforcement Choice in a Shared Fishery," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(4), pages 559-575, August.
  • Handle: RePEc:kap:enreec:v:61:y:2015:i:4:p:559-575
    DOI: 10.1007/s10640-014-9806-8
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    References listed on IDEAS

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    1. Van Long, Ngo, 2012. "Applications of Dynamic Games to Global and Transboundary Environmental Issues: A Review of the Literature," Strategic Behavior and the Environment, now publishers, vol. 2(1), pages 1-59, January.
    2. Hatcher, Aaron, 2005. "Non-compliance and the quota price in an ITQ fishery," Journal of Environmental Economics and Management, Elsevier, vol. 49(3), pages 427-436, May.
    3. Lindroos, Marko & Munro, Gordon, 2013. "Introduction to the Special Issue on Game Theory and Fisheries: Recent Issues," Strategic Behavior and the Environment, now publishers, vol. 3(1-2), pages 1-5, January.
    4. Hatcher, Aaron, 2012. "Market power and compliance with output quotas," Resource and Energy Economics, Elsevier, vol. 34(2), pages 255-269.
    5. Clark, Colin W. & Munro, Gordon R., 1975. "The economics of fishing and modern capital theory: A simplified approach," Journal of Environmental Economics and Management, Elsevier, vol. 2(2), pages 92-106, December.
    6. 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.
    7. Nøstbakken, Linda, 2013. "Formal and informal quota enforcement," Resource and Energy Economics, Elsevier, vol. 35(2), pages 191-215.
    8. Aaron Hatcher & Daniel Gordon, 2005. "Further Investigations into the Factors Affecting Compliance with U.K. Fishing Quotas," Land Economics, University of Wisconsin Press, vol. 81(1).
    9. Munro, Gordon R., 2009. "Game theory and the development of resource management policy: the case of international fisheries," Environment and Development Economics, Cambridge University Press, vol. 14(01), pages 7-27, February.
    10. Jon G. Sutinen & Peder Andersen, 1985. "The Economics of Fisheries Law Enforcement," Land Economics, University of Wisconsin Press, vol. 64(4), pages 387-397.
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