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The Tragedy of the Commons in a Fishery when Relative Performance Matters

Author

Listed:
  • Ngo Van Long

    (Department of Economics, McGill University)

  • Stephanie F. McWhinnie

    () (School of Economics, University of Adelaide)

Abstract

This paper presents a simple model of a common access fishery where fishermen care about relative performance as well as absolute profits. Our specification captures the idea that status (which depends on relative performance) in a community infuences a person's well-being. We consider two alternative specifications of relative performance. In our first speci cation, relative performance is equated to relative after-tax profits. In our second specification, it is relative harvests that matter. 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 examine a tax package, consisting of a tax on relative profit and a tax on effort, and an individual quota as alternatives to implement the socially effcient equilibrium.

Suggested Citation

  • Ngo Van Long & Stephanie F. McWhinnie, 2010. "The Tragedy of the Commons in a Fishery when Relative Performance Matters," School of Economics Working Papers 2010-07, University of Adelaide, School of Economics.
  • Handle: RePEc:adl:wpaper:2010-07
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    File URL: http://www.economics.adelaide.edu.au/research/papers/doc/wp2010-07.pdf
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    References listed on IDEAS

    as
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    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. 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.
    2. repec:now:jnlsbe:102.00000065t is not listed on IDEAS
    3. Anne-Sarah Chiambretto & Hubert Stahn, 2017. "Voluntary Management of Fisheries under an Uncertain Background Legislative Threat," Working Papers halshs-01500543, HAL.
    4. 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.
    5. 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.
    6. 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.
    7. repec:spr:dyngam:v:7:y:2017:i:3:d:10.1007_s13235-016-0192-4 is not listed on IDEAS
    8. 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, pages 1-35.

    More about this item

    Keywords

    relative income; 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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