Strategic Joint Production Under Common-Pool Output Quotas: The Case of Fisheries Bycatch
We develop a simple game-theoretic model to explain the production decisions of firms when the production of a marketed good is complementary with the output of an associated good for which no market is available and the output of both goods is regulated by exogenously determined common pool output quotas. This scenario matches that of many fisheries in which regulators attempt to simultaneously manage harvests of targeted species and bycatch of other species through common pool quotas and seasonal closures. Under a competitive equilibrium, individual fishermen fail to fully account for the external effects of their harvest decisions on the season length, leading to excessive discards, drastically shortened seasons, and large shares of un-harvested quota for all but the smallest of fishery sizes. These results are robust for even very efficient (low-bycatch) fishing gears. We examine the sensitivity of our predictions to changes in output prices, discard costs, quota allocations and differing degrees of spatial correlation of target and bycatch species. Finally, we derive the optimal bycatch penalty function and describe its significance in light of various policy alternatives available to regulators.
|Date of creation:||2006|
|Date of revision:|
|Contact details of provider:|| Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202|
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Holland, Daniel S. & Ginter, Jay J. C., 2001. "Common property institutions in the Alaskan groundfish fisheries," Marine Policy, Elsevier, vol. 25(1), pages 33-42, January.
- 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.
- 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.
- Jensen, Frank & Vestergaard, Niels, 2002. "Moral hazard problems in fisheries regulation: the case of illegal landings and discard," Resource and Energy Economics, Elsevier, vol. 24(4), pages 281-299, November.
- Turner, Matthew A., 1997. "Quota-Induced Discarding in Heterogeneous Fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 33(2), pages 186-195, June.
- Herrera, Guillermo E., 2005. "Stochastic bycatch, informational asymmetry, and discarding," Journal of Environmental Economics and Management, Elsevier, vol. 49(3), pages 463-483, May.
- Boyce, John R., 1996. "An Economic Analysis of the Fisheries Bycatch Problem," Journal of Environmental Economics and Management, Elsevier, vol. 31(3), pages 314-336, November.
When requesting a correction, please mention this item's handle: RePEc:ags:aaea06:21468. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.