To ensure the long-term conservation and sustainable use of straddling fish stocks, the 1995 United Nations Fish Stock Agreement calls for the establishment of regional fisheries management organizations to manage them. This article studies the potential for cooperation in straddling stock fisheries when the cooperative coalition of countries acts as a Stackelberg leader against the remaining singleton countries. Within the Stackelberg fishing game with several interested parties, the result shows that an increase in the cooperation level leads to an increase not only in the steady-state fish stock, but also in the total rent of the fishery. Further, the outlook for cooperation is better within the Stackelberg game, where the cooperative coalition acts as a leader, than in the Cournot game. At the stable equilibrium of a Stackelberg game, not only is the steady-state fish stock higher, but also the total resource rent, participants' rent, and non-participants' rent are higher than those of the Cournot-Nash stable equilibrium. The new-entrant issue is a problem for the conservation of fish stock in the Stackelberg game. Self-financed transfers with commitments of the initial stable coalition will increase the level of cooperation. The theoretical findings are illustrated by a numerical example of how to reach stable full cooperation and used to indicate possible ways forward for the South China Sea fisheries.
JEL Classification Code: Q22, Q27, R13, R58