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Social Network Analysis of Price Dispersion in Fishing Quota Lease Markets

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  • Andrew J. Ropicki
  • Sherry L. Larkin

Abstract

We present a novel technique for analyzing price dispersion in non-centralized quota lease markets where pairwise negotiations determine price and price information from past transactions is not generally available. The technique does not require fishing cost or ex-vessel price data and employs social network analysis metrics (namely degree centrality and constraint) to measure access to information and network position for buyers and sellers. Our method is applied to the Gulf of Mexico red snapper quota lease market and finds that certain quota lease traders with larger information-sharing networks or stronger network positions have greater negotiating power. Also, average quota lease prices varied by region even though there are no geographic trading restrictions. Results indicate social networks are correlated with price dispersion and inefficiencies in the trading markets that can undermine the success of catch share programs that seek to improve fishery profits and reduce overcapacity.

Suggested Citation

  • Andrew J. Ropicki & Sherry L. Larkin, 2014. "Social Network Analysis of Price Dispersion in Fishing Quota Lease Markets," Marine Resource Economics, University of Chicago Press, vol. 29(2), pages 157-176.
    • Handle: RePEc:ucp:mresec:doi:10.1086/676852
    DOI: 10.1086/676852
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    2. Aaron Hatcher, 2022. "A Model of Quota Prices in a Multispecies Fishery with “Choke” Species and Discarding," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(4), pages 825-846, August.
    3. Carmen Pedroza-Gutiérrez & Juan M. Hernández, 2020. "Social Networks and Supply Chain Management in Fish Trade," SAGE Open, , vol. 10(2), pages 21582440209, June.
    4. Oostdijk, Maartje & Santos, Maria J. & Agnarsson, Sveinn & Woods, Pamela J., 2019. "Structure and evolution of cod quota market networks in Iceland over times of financial volatility," Ecological Economics, Elsevier, vol. 159(C), pages 279-290.

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