Markov-Perfect Rent Dissipation in Rights-Based Fisheries

Adriana Valcu and Quinn Weninger ()

Staff General Research Papers Archive from Iowa State University, Department of Economics

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 fi ndings provide new insights for designing rights-based programs capable of generating resource rent in marine fisheries.

Keywords: Markov Perfect Nash equilibrium; individual transferable quotas; production externalities; resource rent. (search for similar items in EconPapers)
JEL-codes: Q2 (search for similar items in EconPapers)
Date: 2013-06-24
New Economics Papers: this item is included in nep-env
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Citations: View citations in EconPapers (2)

Published in Marine Resource Economics, June 2013, vol. 28 no. 2, pp. 111-131

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http://www2.econ.iastate.edu/papers/p13820-2011-05-24.pdf (application/pdf)

Related works:
Working Paper: Markov-Perfect Rent Dissipation in Rights-Based Fisheries (2013)
Working Paper: Markov-Perfect rent dissipation in rights-based fisheries (2012)
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