IDEAS home Printed from https://ideas.repec.org/p/rff/dpaper/dp-08-01.html
   My bibliography  Save this paper

Ex-vessel Pricing and IFQs: A Strategic Approach

Author

Listed:
  • Fell, Harrison

    (Resources for the Future)

Abstract

In this paper, intraseasonal fishing is modeled as a differential game between fishermen in a total allowable catch–regulated fishery with and without individual fishing quotas (IFQs). Heterogeneous harvest values are included by incorporating time-specific harvest costs and a stock effect into fishermen’s profit functions. I also allow for strategic interaction among fishermen via ex-vessel price dynamics. The equilibrium harvest strategies of the differential games are solved numerically through the use of a genetic algorithm. I demonstrate 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 fishermen, beyond competition for a greater share of the total allowable catch, can still exist under IFQ management and may be substantial enough to be able to prevent sizeable rent transfers from the processing sector to the harvesting sector.

Suggested Citation

  • Fell, Harrison, 2008. "Ex-vessel Pricing and IFQs: A Strategic Approach," RFF Working Paper Series dp-08-01, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-08-01
    as

    Download full text from publisher

    File URL: http://www.rff.org/RFF/documents/RFF-DP-08-01.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fershtman, Chaim & Kamien, Morton I, 1990. "Turnpike Properties in a Finite-Horizon Differential Game: Dynamic Duopoly with Sticky Prices," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(1), pages 49-60, February.
    2. Homans, Frances R. & Wilen, James E., 1997. "A Model of Regulated Open Access Resource Use," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 1-21, January.
    3. Alemdar, Nedim M. & Sirakaya, Sibel, 2003. "On-line computation of Stackelberg equilibria with synchronous parallel genetic algorithms," Journal of Economic Dynamics and Control, Elsevier, vol. 27(8), pages 1503-1515, June.
    4. Costello, Christopher J & Deacon, Robert T, 2007. "The Efficiency Gains from Fully Delineating Rights in an ITQ Fishery," University of California at Santa Barbara, Economics Working Paper Series qt56n8x9qb, Department of Economics, UC Santa Barbara.
    5. Mercenier, Jean & Michel, Philippe, 1994. "Discrete-Time Finite Horizon Appromixation of Infinite Horizon Optimization Problems with Steady-State Invariance," Econometrica, Econometric Society, vol. 62(3), pages 635-656, May.
    6. Homans, Frances R. & Wilen, James E., 2005. "Markets and rent dissipation in regulated open access fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 49(2), pages 381-404, March.
    7. Fershtman, Chaim & Kamien, Morton I, 1987. "Dynamic Duopolistic Competition with Sticky Prices," Econometrica, Econometric Society, vol. 55(5), pages 1151-1164, September.
    8. Alemdar, Nedim M. & Ozyildirim, Suheyla, 1998. "A genetic game of trade, growth and externalities," Journal of Economic Dynamics and Control, Elsevier, vol. 22(6), pages 811-832, June.
    9. Scott C. Matulich & Murat Sever, 1999. "Reconsidering the Initial Allocation of ITQs: The Search for a Pareto-Safe Allocation between Fishing and Processing Sectors," Land Economics, University of Wisconsin Press, vol. 75(2), pages 203-219.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Matthew N. Reimer & Joshua K. Abbott & James E. Wilen, 2014. "Unraveling the Multiple Margins of Rent Generation from Individual Transferable Quotas," Land Economics, University of Wisconsin Press, vol. 90(3), pages 538-559.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matthew N. Reimer & Joshua K. Abbott & James E. Wilen, 2014. "Unraveling the Multiple Margins of Rent Generation from Individual Transferable Quotas," Land Economics, University of Wisconsin Press, vol. 90(3), pages 538-559.
    2. Alemdar, Nedim M. & Sirakaya, Sibel & Husseinov, Farhad, 2006. "Optimal time aggregation of infinite horizon control problems," Journal of Economic Dynamics and Control, Elsevier, vol. 30(4), pages 569-593, April.
    3. Yue Tan & Sunny L. Jardine, 2019. "Considering Economic Efficiency in Ecosystem-Based Management: The Case of Horseshoe Crabs in Delaware Bay," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(2), pages 511-538, February.
    4. Tarui, Nori & Mason, Charles F. & Polasky, Stephen & Ellis, Greg, 2008. "Cooperation in the commons with unobservable actions," Journal of Environmental Economics and Management, Elsevier, vol. 55(1), pages 37-51, January.
    5. Slade, Margaret E., 1999. "Sticky prices in a dynamic oligopoly: An investigation of (s,S) thresholds," International Journal of Industrial Organization, Elsevier, vol. 17(4), pages 477-511, May.
    6. Akihito Asano & Kelly Neill & Satoshi Yamazaki, 2016. "Decomposing Fishing Effort: Modelling The Sources Of Inefficiency In A Limited-Entry Fishery," Economics Discussion / Working Papers 16-23, The University of Western Australia, Department of Economics.
    7. Cellini, Roberto & Lambertini, Luca, 2007. "A differential oligopoly game with differentiated goods and sticky prices," European Journal of Operational Research, Elsevier, vol. 176(2), pages 1131-1144, January.
    8. Agnieszka Wiszniewska-Matyszkiel & Marek Bodnar & Fryderyk Mirota, 2015. "Dynamic Oligopoly with Sticky Prices: Off-Steady-state Analysis," Dynamic Games and Applications, Springer, vol. 5(4), pages 568-598, December.
    9. repec:ags:aaea22:335749 is not listed on IDEAS
    10. Anderson, James L. & Asche, Frank & Garlock, Taryn, 2018. "Globalization and commoditization: The transformation of the seafood market," Journal of Commodity Markets, Elsevier, vol. 12(C), pages 2-8.
    11. Roberto Cellini & Luca Lambertini, 2006. "Workers’ enterprises are not perverse: differential oligopoly games with sticky price," Review of Economic Design, Springer;Society for Economic Design, vol. 10(3), pages 233-248, December.
    12. Sibel Sirakaya & Stephen J. Turnovsky & Nedim M. Alemdar, 2009. "Trade, Growth, and Environmental Quality," Review of International Economics, Wiley Blackwell, vol. 17(5), pages 906-926, November.
    13. R. Cellini & L. Lambertini, 2002. "Price vs Quantity in a Dynamic Duopoly Game with Capacity Accumulation," Working Papers 449, Dipartimento Scienze Economiche, Universita' di Bologna.
    14. Süheyla Özyildirim & Nedim M. Alemdar, 1999. "Knowledge Spillover, Transboundary Pollution, and Growth," Computing in Economics and Finance 1999 322, Society for Computational Economics.
    15. R. Cellini & L. Lambertini, 2003. "Capacity Accumulation and Utilization in a Differential Duopoly Game," Working Papers 465, Dipartimento Scienze Economiche, Universita' di Bologna.
    16. Miravete, Eugenio J., 2003. "Time-consistent protection with learning by doing," European Economic Review, Elsevier, vol. 47(5), pages 761-790, October.
    17. Valderrama, Diego & Anderson, James L., 2010. "Market interactions between aquaculture and common-property fisheries: Recent evidence from the Bristol Bay sockeye salmon fishery in Alaska," Journal of Environmental Economics and Management, Elsevier, vol. 59(2), pages 115-128, March.
    18. R. Cellini & L. Lambertini, 2008. "Weak and Strong Time Consistency in a Differential Oligopoly Game with Capital Accumulation," Journal of Optimization Theory and Applications, Springer, vol. 138(1), pages 17-26, July.
    19. Katarzyna Kańska & Agnieszka Wiszniewska-Matyszkiel, 2022. "Dynamic Stackelberg duopoly with sticky prices and a myopic follower," Operational Research, Springer, vol. 22(4), pages 4221-4252, September.
    20. L. Lambertini, 2010. "Oligopoly with Hyperbolic Demand: A Differential Game Approach," Journal of Optimization Theory and Applications, Springer, vol. 145(1), pages 108-119, April.
    21. Håkan Eggert & Ragnar Tveterås, 2013. "Productivity development in Icelandic, Norwegian and Swedish fisheries," Applied Economics, Taylor & Francis Journals, vol. 45(6), pages 709-720, February.

    More about this item

    Keywords

    individual fishing quotas; property rights; differential games; genetic algorithm;
    All these keywords.

    JEL classification:

    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rff:dpaper:dp-08-01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Resources for the Future (email available below). General contact details of provider: https://edirc.repec.org/data/rffffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.