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Playing Chicken with Salmon

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  • Jon Olaf Olaussen

    () (Department of Economics, Norwegian University of Science and Technology)

Abstract

Wild Atlantic salmon are traditionally harvested from both the sea and spawning rivers during spawning runs. From an economic point of view, the return from sport fishing in rivers is several times higher than marine ‘for meat only’ harvests. This situation calls for a side payment regime where river owners pay marine fishermen not to fish, and where both parties gain. This paper argues that the reason why such side payment regimes are rarely seen, despite the obvious mutual gain, is due to the potential free-riding incentives among river owners. Although it is shown that the decision each river owner faces can be described as a game of chicken, taking the stochastic ecology into account may reveal a different pay-off structure. It is also demonstrated that the stochastic ecology of salmon, combined with price rigidities in the rivers, may explain the lack of side payment regimes.

Suggested Citation

  • Jon Olaf Olaussen, 2006. "Playing Chicken with Salmon," Working Paper Series 7406, Department of Economics, Norwegian University of Science and Technology.
  • Handle: RePEc:nst:samfok:7406
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    File URL: http://www.svt.ntnu.no/iso/WP/2006/10Playing_chicken.pdf
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    References listed on IDEAS

    as
    1. Weitzman, Martin L., 2002. "Landing Fees vs Harvest Quotas with Uncertain Fish Stocks," Journal of Environmental Economics and Management, Elsevier, vol. 43(2), pages 325-338, March.
    2. Fudenberg, Drew & Maskin, Eric, 1986. "The Folk Theorem in Repeated Games with Discounting or with Incomplete Information," Econometrica, Econometric Society, vol. 54(3), pages 533-554, May.
    3. Laukkanen, Marita, 2003. "Cooperative and non-cooperative harvesting in a stochastic sequential fishery," Journal of Environmental Economics and Management, Elsevier, vol. 45(2, Supple), pages 454-473, March.
    4. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, vol. 27(2), pages 253-279, August.
    5. Reed, William J., 1979. "Optimal escapement levels in stochastic and deterministic harvesting models," Journal of Environmental Economics and Management, Elsevier, vol. 6(4), pages 350-363, December.
    6. Jon Olaf Olaussen & Anders Skonhoft, 2005. "The bioeconomics of a wild Atlantic salmon (Salmo salar) recreational fishery," Working Paper Series 6105, Department of Economics, Norwegian University of Science and Technology.
    7. Marita Laukkanen, 2001. "A Bioeconomic Analysis of the Northern Baltic Salmon Fishery: Coexistence versus Exclusion of Competing Sequential Fisheries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(3), pages 293-315, March.
    8. Bjorndal, Trond, 1988. "The optimal management of North Sea Herring," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 9-29, March.
    9. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, January.
    10. B. A. Cook & R. L. McGaw, 1996. "Sport and Commercial Fishing Allocations for the Atlantic Salmon Fisheries of the Miramichi River," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 44(2), pages 165-171, July.
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    Cited by:

    1. Soile Oinonen & Lone Grønbæk & Marita Laukkanen & Polina Levontin & Marko Lindroos & Emmi Nieminen & Katja Parkkila & Pedro Pintassilgo & Henni Pulkkinen & Atso Romakkaniemi, 2016. "International Fisheries Management and Recreational Benefits: The Case of Baltic Salmon," Marine Resource Economics, University of Chicago Press, vol. 31(4), pages 433-451.

    More about this item

    Keywords

    Atlantic salmon; game of chicken; recreational versus commercial fishing; side payment; stochastic ecology;

    JEL classification:

    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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