Yoav Wachsman University of Hawaii

Size: px

Start display at page:

Download "Yoav Wachsman University of Hawaii"

Edwin Joel Mills
5 years ago
Views:

1 A Model of Fishig Coflicts i Foreig Fisheries Yoav Wachsma Uiversity of Hawaii

2 A Brief History of Fisheries Exploitatio Util the later half of this cetury most marie fisheries were accessible to DWFNs The Exteded Fisheries Jurisdictio created 200 mile Exclusive Ecoomic Zoes (982) May of the world fisheries are ow uder the cotrol of developig atios Some developig atios permit DWFNs to exploit their fisheries for a fishig fee Example: Parties to the Nauru Agreemet charge a 5% fishig fee (Campbell, 96)

3 Exploitatio of Foreig Fisheries Without regulatio dyamic exteralities will lead firms to over-fish the stock (Levhari & Mirma, 80) Coastal atios may choose domestic exploitatio, foreig exploitatio, both or either by splittig a Total Allowable Catch betwee fleets (Charles, 86) Coastal atios beefit from usig a dual-tax system, but ca ot simultaeously maximize their reveue ad et retur from fishery (Clarke ad Muro, 87 & 9) With domestic exploitatio, coastal atios will use taxes to iduce a commo equilibrium (Raissi, 0)

4 Cotributios to Literature Base model geeralizes the iteractio to fishig firms (to see how chages i affect behavior) Extesio of model allows the fishery ower to select the umber of firms that exploit the fishery Objective : Characterize the fishig fee ad whether it is socially optimal (use o-cooperative game theory to fid the subgame perfect equilibrium) Objective 2: Determie the umber of firms that the fishery ower admits to the fishery ad whether the arragemet is socially optimal

5 A Model with Exogeous Firms dx dt γx x i= () (Logistic Growth Fuctio ) = K h i (2) h i = qxe i (CPUE Productio Fuctio) Size of Stock Itrisic q Carryig Growth Harvest Capacity Rate of Firm i K e i i= γ Catchability Fishig Effort Coeff. (3) (Biologically Steady Stock) x& ( e) = ( ) ce (4) MaxΠ = r p qx&( e) e (Steady-state Profit) e i i [( r) b c] (5) (Reactio Fuctio) e ( eˆ i j γ ) = ( ) eˆ j 2 ( r) bq Firm s Price Share Firm of Species i s Harvest MC of Effort i

6 Iteractio Betwee Firms Firms 2 s Effort e (e 2, r 0 ) e (e 2, r ) e 2 (r 0 ) e 2 (r ) e 2 (e, r 0 ) e 2 (e, r ) e (r ) e (r 0 ) Firm s Effort

7 Bioomic Equilibrium Bioomic Equilibrium ( ) ( ) + = b r c q r e i ) ( γ (6) (Equilibrium Effort) (7) r MAX = ( c/b). b = pqk (margial beefit of effort) If r r MAX the there will be o exploitatio The total equilibrium effort, E(r), decreases i r The bioomic equilibrium stock icreases i r Total bioomic harvest, H(r), is cocave i r (8) ( ) ( ) ( ) ( ) + + = b r c b r c K r H ) ( γ

8 Results of Base Model Ower s Objective: (9) MAX r rph(r) Propositio : There exist at least oe fishig fee, r *, that maximizes the ower s reveue fuctio. 0 < r * < r MAX The socially optimal fee maximizes the et retur from the fishery: (0) Π(r) = ph(r) ce(r) Propositio 2: If the cocavity coditio holds (ad i most other cases), the r * is higher tha the socially optimal fee. Firms exert less effort tha is socially optimal.

9 A Schaefer Represetatio Net Retur & Reveue Π(r) ce(r) ph(r) R(r) E(r * ) E(r) E(r MSY ) E(0) Effort as a Fuctio of r

10 A Model with Edogeous Firms The Exteded Fisheries Jurisdictio allows the fishery ower to choose the umber of firms The Effects of a Icrease i the Number of Firms Each of the firm s effort ad profit will fall Total effort will icrease reducig the stock s size Total bioomic harvest will icrease if b/c < 2. (If b/c < 2 the the ower will set = ) Ower s Objective: () Max, r = rph(r, )

11 The Ower s Reveue Fuctio R r

12 Results of Extesio The ower does ot restrict access to the fishery The oly feasible iterior solutio yields less reveue tha free access for all values of the parameters The ower will set r OA = (b c)/(b + c) r OA Solves for the ower s reveue uder ope access (2) R(, r) = rp Kγ c c ( r) b ( r) b The ope access solutio maximizes et retur E(, r OA ) is socially optimal

13 Welfare Implicatios Whe the Number of Firms is Exogeous The coastal atio charges a fee that is too high If the umber of firms is sufficietly small the atioalizig the fishery may reduce welfare Whe the Number of Firms is Edogeous Ower does ot restrict etry to the fishery The ower maximizes its reveue ad et retur Firms do ot ear ay profit

14 Why Owers Restrict Access To protect domestic fishig firms Out of evirometal cocers (worries about spillover ad productio exteralities) Out of political cosideratios (support oe DWFN i exchage for aid or techology) Because moitorig cost icreases as the umber of firms icreases Because they must charge a low fishig fee Ower may be able to extract the ret from the fishery usig a two-tier tariff

15 The Ed Questios? Commets! Suggestios?

Overlapping Generations

Overlapping Generations Eco. 53a all 996 C. Sims. troductio Overlappig Geeratios We wat to study how asset markets allow idividuals, motivated by the eed to provide icome for their retiremet years, to fiace capital accumulatio