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Cost sharing and catch sharing

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  • Matthiasson, Thorolfur

Abstract

The model developed in this paper attempts to provide an explanation of the fact that Icelandic vessel owners and Icelandic skippers do not share costs of operation of a vessel. In the model a skipper is contracted to take a fishing vessel to the fishing ground. The skipper is remunerated with a share of the catch, subject to an agreed minimum. Skippers and vessel owners are modelled as if risk neutral. Skippers develop a fishing strategy which is more costly, the higher the value of the potential catch associated with that strategy. Costs that accrue are partly pecuniary (and shareable) and partly skipper-specific (and non- shareable). The conclusions of the paper demonstrate that given the assumptions of our model, a vessel owner should prefer a remuneration contract with a positive revenue share and zero cost share.
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Suggested Citation

  • Matthiasson, Thorolfur, 1999. "Cost sharing and catch sharing," Journal of Development Economics, Elsevier, vol. 58(1), pages 25-44, February.
    • Handle: RePEc:eee:deveco:v:58:y:1999:i:1:p:25-44
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    References listed on IDEAS

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    1. Avishay Braverman & Joseph E. Stiglitz, 1986. "Cost-Sharing Arrangements under Sharecropping: Moral Hazard, Incentive Flexibility, and Risk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(3), pages 642-652.
    2. Lee G. Anderson, 1982. "The Share System in Open-Access and Optimally Regulated Fisheries," Land Economics, University of Wisconsin Press, vol. 58(4), pages 435-449.
    3. Dupont, D.P., 1993. "Price Uncertainty,Expectations Formation and Fishers' Allocation Choice," Working Papers 1993-1, Brock University, Department of Economics.
    4. Basu, Kaushik, 1992. "Limited liability and the existence of share tenancy," Journal of Development Economics, Elsevier, vol. 38(1), pages 203-220, January.
    5. Stiglitz, J.E., 1988. "Sharecropping," Papers 11, Princeton, Woodrow Wilson School - Discussion Paper.
    6. Sutinen, J G, 1979. "Fishermen's Remuneration Systems and Implications for Fisheries Development," Scottish Journal of Political Economy, Scottish Economic Society, vol. 26(2), pages 147-162, June.
    7. Earl O. Heady, 1947. "Economics of Farm Leasing Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(3), pages 659-678.
    8. Thorolfur Matthiasson, 1997. "Fixed wage or share: Contingent contract renewal and skipper motivation," Labor and Demography 9702002, University Library of Munich, Germany.
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    Cited by:

    1. Nguyen, Quang & Leung, PingSun, 2009. "Choice of Remuneration Regime in Fisheries: The Case of Hawaii’s Longline Fisheries," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(3), pages 1-20, December.
    2. Thorolfur Matthiasson, 1997. "Fixed wage or share: Contingent contract renewal and skipper motivation," Labor and Demography 9702002, University Library of Munich, Germany.
    3. César Salazar Espinoza, 2015. "Share Contract Choices and Economic Performance: Empirical Evidence from the Artisanal Fisheries Sector in Chile," Marine Resource Economics, University of Chicago Press, vol. 30(1), pages 71-95.
    4. McConnell, Kenneth E. & Price, Michael, 2006. "The lay system in commercial fisheries: Origin and implications," Journal of Environmental Economics and Management, Elsevier, vol. 51(3), pages 295-307, May.

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    More about this item

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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