Markov-Perfect Rent Dissipation in Rights-Based Fisheries
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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.
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This article is from Marine Resource Economics 28 (2013): 111, doi: 10.5950/0738-1360-28.2.111. Posted with permission.