The sharing of a migrating fish stock between two players is considered. Data on the Northeast Atlantic mackerel are used to model the fishery. A growth function is estimated, and random fluctuations in growth and recruitment are used to simulate the fishery. Three different migration models are considered: i) deterministic, ii) stock-dependent, and iii) purely random. With deterministic migrations, the minor player has a disproportionate bargaining strength and must be offered a relatively large share of a cooperative solution. The minor player's bargaining strength is weak if the migrations into his economic zone are stock-dependent, but strong if they are purely random. The risk of extinction is shown to be high without stock-dependent unit cost of fish, and to get a viable Nash-Cournot equilibrium the major player's share must be well above one half.

JEL Classification Codes: Q22, Q28, C72

This study analyzes the determinants of the choice of remuneration system and examines their influence on the economic performance of fisheries. The purse seine fisheries in Khanh Hoa province, Vietnam, are used as the study case, with data collected from 158 fishing households in 2005 and 2008. The principal-agent framework and the propensity score-matching technique are employed for the analysis. We demonstrate that insurance incentive-based problems are the rationale for the coexistence of share contracts and flat-wage contracts, even though share contracts bring greater economic benefit to both vessel owners and crew members. Crew members are found to be risk averse. Crew size and residence are important factors that influence the choice of contracts. Compared with flat-wage contracts, small share-contracted vessels are more efficient in managing the operating costs, while large ones are more efficient in yielding a high catch.

JEL Classification Codes: D01, M41, Q22

Due to the unprecedented population growth and increased economic activity in coastal areas, the health and hence value of coastal waterbody resources have been the subject of interest in recent years. In this article we estimate the value of a healthy waterbody through a hedonic property price analysis utilizing water quality as the amenity of interest. We compare hedonic analysis results using technical measures of water quality to the results using a non-technical measure of water quality “location grade” available in an urban coastal housing market of South Florida. Our results indicate that water quality improvement is associated with higher property values. In the comparison between technical and non-technical measures of water quality, we find that the technical measures provide better prediction of housing prices than the non-technical location grade. We further impute implicit prices for water quality improvement where significant mean willingness-to-pay (WTP) estimates range from $7,531 to $43,158.

JEL Classification Codes: Q25, Q51, R21, D60

The bio-economically optimal stock size of the alien invasive red king crab in the Barents Sea, representing a commercial value as well as a threat to the ecosystem and its services, is explored assuming linear as well as non-linear relationships between crab stock size and ecosystem damage. The results show that the management goal of harvesting the crab at maximum sustainable yield cannot be reconciled with the overall objective of the Barents Sea management plan of securing ecosystem structure. The importance of identifying the correct damage relationship is demonstrated by large differences in optimal stock sizes and altered sensitivity of the models to input parameters. The analysis also shows the importance of knowing the carrying capacity of the crab stock, as well as the carrying capacity of the natural ecosystem with respect to the crab.

JEL Classification Codes: Q2, Q5

We present a continuous, nonlinear, stochastic, and dynamic model for capital investment in the exploitation of a renewable resource. Both the resource stock and capital are treated as state variables. The resource owner controls fishing effort and the investment rate in an optimal way. Biological stock growth and the capital depreciation rate are stochastic in the model. We find that the stochastic resource should be managed conservatively. The capital utilization rate is found to be a nonincreasing function of stochasticity. Investment could be either higher or lower depending on the interaction between capital and the resource stock. In general, a stochastic capital depreciation rate has no strong influence on optimal management. In the long run, the optimal harvest for a stochastic resource becomes lower than the deterministic level.

JEL Classification Codes: C61, Q22, Q57