Markov-Perfect rent dissipation in rights-based fisheries

Date
2012-09-26
Authors
Valcu-Lisman, Adriana
Weninger, Quinn
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Altmetrics
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Research Projects
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Economics
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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 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. These findings provide new insights for designing rights-based programs capable of generating resource rent in marine fisheries.

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Markov Perfect equilibrium, Markov Perfect Nash equilibrium, individual transferable quotas, production externalities, resource rent
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