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Is the behavior of fishers rational under Individual Transferable Quotas (ITQs) regimes? An Experimental Approach

Author

Listed:
  • Keisaku Higashida

    () (School of Economics, Kwansei Gakuin University)

  • Kenta Tanaka

    (Graduate School of Environmental Studies, Tohoku University)

  • Shunsuke Managi

    (Graduate School of Environmental Studies, Tohoku University)

Abstract

Marine resource depletion is a critical concern for humankind. Individual Transferable Quota (ITQ) regimes are among the most effective measures to tackle this problem. Employing an experimental approach, this study examines the rationality of fishers under an ITQ regime. In particular, this study focuses on the case where fishers can change their own vessel scales in the beginning of each period in each experiment. We find that the higher the quota price is, the more irrationally fishers behave. Moreover, vessel scales and initial allocations can influence the rationality of fishers.

Suggested Citation

  • Keisaku Higashida & Kenta Tanaka & Shunsuke Managi, 2011. "Is the behavior of fishers rational under Individual Transferable Quotas (ITQs) regimes? An Experimental Approach," Discussion Paper Series 73, School of Economics, Kwansei Gakuin University, revised Aug 2011.
  • Handle: RePEc:kgu:wpaper:73
    as

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    File URL: http://192.218.163.163/RePEc/pdf/kgdp73.pdf
    File Function: First version, 2011
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    References listed on IDEAS

    as
    1. Newell, Richard G. & Sanchirico, James N. & Kerr, Suzi, 2005. "Fishing quota markets," Journal of Environmental Economics and Management, Elsevier, vol. 49(3), pages 437-462, May.
    2. Eythórsson, Einar, 2000. "A decade of ITQ-management in Icelandic fisheries: consolidation without consensus," Marine Policy, Elsevier, vol. 24(6), pages 483-492, November.
    3. Quinn Weninger, 1998. "Assessing Efficiency Gains from Individual Transferable Quotas: An Application to the Mid-Atlantic Surf Clam and Ocean Quahog Fishery," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 750-764.
    4. M. Keith Chen & Venkat Lakshminarayanan & Laurie R. Santos, 2006. "How Basic Are Behavioral Biases? Evidence from Capuchin Monkey Trading Behavior," Journal of Political Economy, University of Chicago Press, vol. 114(3), pages 517-537, June.
    5. Anderson, Christopher M., 2004. "How Institutions Affect Outcomes in Laboratory Tradable Fishing Allowance Systems," Agricultural and Resource Economics Review, Cambridge University Press, vol. 33(02), pages 193-208, October.
    6. Anderson, Christopher M. & Sutinen, Jon G., 2006. "The effect of initial lease periods on price discovery in laboratory tradable fishing allowance markets," Journal of Economic Behavior & Organization, Elsevier, vol. 61(2), pages 164-180, October.
    7. Anderson, Lee G., 1991. "A note on market power in ITQ fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 21(3), pages 291-296, November.
    8. Anderson, Christopher M., 2004. "How Institutions Affect Outcomes in Laboratory Tradable Fishing Allowance Systems," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 33(2), October.
    9. Tom Kompas & Tuong Nhu Che, 2003. "Efficiency Gains and Cost Reductions from Individual Transferable Quotas: A Stochastic Cost Frontier for," International and Development Economics Working Papers idec03-6, International and Development Economics.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Individual Transferable Quotas (ITQs); experiment; rational behavior;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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