Efficiency of Individual Transferable Quotas (ITQs) when Fishers are able to Choose Vessel Sizes: An Experimental Approach

Keisaku Higahsida (), Kenta Tanaka and Shunsuke Managi
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Keisaku Higahsida: School of Economics, Kwansei Gakuin University
Authors registered in the RePEc Author Service: Keisaku Higashida

No 57, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: Employing an experimental approach, this paper examines whether the efficiency of fishery management can be achieved under Individual Transferable Quotas (ITQs) regimes, when fishers can choose vessel sizes. In addition to the most common types of experiments for trading permits, we analyze the situation in which the subjects choose one from two vessel types: a large-scale or a small-scale. The fixed cost for the large-scale is higher than that for the small-scale, whereas the variable cost for the large-scale is lower. We find that the average trading price converges to the theoretical equilibrium price given numbers of both types of vessels. We also find that vessels are chosen rationally in the sense that, the greater is the average trading price minus the theoretical equilibrium price in the past periods, the less incentive subjects have to invest in large-scale vessels. Moreover, quota prices in the first period could influence not only the quota prices but also the numbers of both types of vessels in the ensuing periods, and initial allocation could affect the rational choice of vessels by subjects/fishers.

Keywords: Individual Transferable Quotas; tradable permits; experiment; double auction (search for similar items in EconPapers)
JEL-codes: C91 Q22 Q28 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2010-06, Revised 2010-06
New Economics Papers: this item is included in nep-exp and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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http://192.218.163.163/RePEc/pdf/kgdp57.pdf First version, 2010 (application/pdf)

Related works:
Journal Article: A laboratory assessment of the choice of vessel size under individual transferable quota regimes (2014)
Working Paper: Efficiency of Individual Transferable Quotas (ITQs) when Fishers are able to Choose Vessel Sizes: An experimental approach (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:57

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