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Markov-Perfect Rent Dissipation in Rights-Based Fisheries

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  • Valcu-Lisman, Adriana
  • Weninger, Quinn

Abstract

We present a general dynamic model of within-season harvesting competition in a fishery managed with individual transferable quotas. Markov-perfect equilibrium (MPE) harvesting and quota purchase strategies are derived using numerical collocation methods. We identify rent loss caused by a heterogeneous-in-value fish stock, congestion on the fishing ground, revenue competition, and stock uncertainty. Our results show that biological, technological, and market conditions under which rents will be dissipated in a standard individual transferable quota program are fairly special. We offer new insights for designing rights-based programs capable of generating resource rent in marine fisheries.

Suggested Citation

  • Valcu-Lisman, Adriana & Weninger, Quinn, 2013. "Markov-Perfect Rent Dissipation in Rights-Based Fisheries," ISU General Staff Papers 201306010700001062, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201306010700001062
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    References listed on IDEAS

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    1. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
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    Cited by:

    1. Singh, Rajesh & Weninger, Quinn, 2017. "Spatial and seasonal equilibrium harvesting in quota-managed multispecies fisheries," ISU General Staff Papers 201708300700001033, Iowa State University, Department of Economics.
    2. Anna M. Birkenbach & Andreea L. Cojocaru & Frank Asche & Atle G. Guttormsen & Martin D. Smith, 2020. "Seasonal Harvest Patterns in Multispecies Fisheries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(3), pages 631-655, March.

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    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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