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1 December 2009 Ex-vessel Pricing and IFQs: A Strategic Approach
HARRISON FELL
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Abstract

In this article, intraseasonal fishing is modeled as a differential game between fishers in a total allowable catch (TAC)–regulated fishery with and without individual fishing quotas (IFQs). Heterogeneous harvest values are included by incorporating time-specific harvest costs and a cumulative-harvest effect into fishers' profit functions. I also allow for strategic interaction among fishers via ex-vessel price dynamics. The equilibrium harvest strategies of the differential games are solved numerically through the use of a genetic algorithm. It is demonstrated how different harvesting sector environments lead to varying degrees of ex-vessel price increases when IFQs are implemented. The primary result shows that possible margins for competition among fishers, other than competition for a greater share of the TAC, can exist even under IFQ management and this competition, especially when combined with noncompetitive processors, may be substantial enough to prevent sizeable rent transfers from the processing sector to the harvesting sector.

JEL Classification Codes: Q22, C73, C61

HARRISON FELL "Ex-vessel Pricing and IFQs: A Strategic Approach," Marine Resource Economics 24(4), 311-328, (1 December 2009). https://doi.org/10.5950/0738-1360-24.4.311
Published: 1 December 2009
JOURNAL ARTICLE
18 PAGES

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KEYWORDS
differential games
genetic algorithm
Individual fishing quotas
property rights
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