Marko Lindroos

SHARING THE BENEFITS OF COOPERATION IN THE NORWEGIAN SPRING-SPAWNING HERRING FISHERY

The purpose of this paper is to study the sharing of cooperative benefits between the potential fishing nations of Norwegian spring-spawning (or Atlanto-Scandian) herring (NSSH). I study a three-player coalitional game where Shapley value is used as a solution concept. The results show that full cooperation is a stable solution of the game, that is, no country finds it optimal to leave the grand coalition. However, it is further shown how full cooperation may become unstable under biological uncertainty. Therefore, I propose a simple mechanism to alleviate the problem. The instability created by biological uncertainty can be significantly reduced when simple modified cooperative strategies are applied. By introducing a safe minimum biological level for the fish stock (SMBL) below which no harvesting takes place and also changing gear selectivities, instability reduces a great deal. However, a safe minimum economic level (SMEL) when there may be perfect stability is shown to be higher than the SMBL.

Sharing Rules and Stability in Coalition Games with Externalities

This paper examines cooperative sharing rules in fisheries coalition games and develops a new sharing rule that takes into account the stability of cooperation when externalities are present. We contribute to existing knowledge by introducing a connection between cooperative games (sharing rules) and non-cooperative games (stability). As an illustrative example, we describe a discrete-time, deterministic, coalition game model of the major agents who exploit the cod stock in the Baltic Sea.

Coalition Formation in Straddling Stock Fisheries: A Partition Function Approach

In this paper the management of straddling fish stocks is approached through a coalition game in partition function form. A two-stage game is applied, assuming ex ante symmetric players and the classical Gordon-Schaefer bioeconomic model. It is shown that the game is characterized by positive externalities — the merger of coalitions increases the payoffs of players who belong to other coalitions. A key result is that, apart from the case of two players, the grand coalition is not a Nash equilibrium outcome. Furthermore, in the case of three or more players the only Nash equilibrium coalition structure is the one formed by singletons. The results indicate that the prospects of cooperation in straddling stock fisheries are low if players can free ride cooperative agreements. Thus, in order to protect cooperation, under the aegis of regional fishery management organizations, unregulated fishing must be prevented.

Optimal Bioeconomic Multispecies Fisheries Management: A Baltic Sea Case Study

Abstract We assess cod, herring, and sprat fisheries in the Baltic Sea under different environmental conditions using a bioeconomic model with simple predation functions. We compare the status quo fishing policy to an optimal policy under two different salinity conditions, which have a link to climate change. The fishery of these species is not at the most profitable level. If the fishing mortalities are lower, economic return will be greater in the long run. A lower fishing mortality for cod, which allows time for individuals to grow and achieve a higher economic value and reproduction potential, would result in the recovery of the cod stock. Under a high salinity level, which leads to better conditions for cod recruitment, the cod stock has a better chance to recover even without a decrease in fishing mortality. Therefore, fishery management is even more important under conditions of low salinity, which are likely to prevail in the future due to changing climate. JEL Classification Codes: Q22, Q54, Q57

WHEN TO RATIFY AN ENVIRONMENTAL AGREEMENT: THE CASE OF HIGH SEAS FISHERIES

We investigate in this paper the optimal timing of cooperative agreements dealing with the harvesting, utilisation or management of marine fish resources. We formulate the optimal timing problem as a two-player dynamic differential game model where both players, e.g. harvesting countries, consider the timing of the agreement as a strategic decision parameter. In other words, the initialisation of the environmental agreement will be subjected to negotiations. The game begins by a period during which the players negotiate on the cooperative agreement. During this period the players optimize their fishing unilaterally, that is, they play a non-cooperative game taking into account that they will enter a cooperative fishery some time later. It is up to the players to decide when they wish to initiate cooperation. We show that there are several possibilities where cooperation is never an option for at least one of the countries. In other cases immediate cooperation may be optimal for both countries. Between these extreme cases is the possibility of some delay in entering cooperation. The determinants of willingness to cooperate in the game include unit costs of harvesting, discount rate, maximum fishing efforts, initial stock size, biological growth rate, carrying capacity and division of profits.

Stability of International Fisheries Agreements Using Precautionary Bioeconomic Harvesting Strategies

International agreements are necessary for exclusion of non-cooperative behavior. We parameterized an age-structured model for the North Sea herring fishery. The reference points of the current harvest control rule operationalize the precautionary approach. Applying the precautionary approach by the grand coalition adds the net present value of the fishery compared to another management approach, a fixed fishing mortality rate strategy. The fishing strategy and costs have a strong impact on the stability of the coalitions. Adopting a precautionary harvest control rule has potential to stabilize multilateral fishing agreements provided that fishing costs are not identical among countries. If they are identical, there will always be incentive for free riding.

On Species Preservation and Non-Cooperative Exploiters

Game-theoretic fisheries models typically consider cases where some players harvest a single common fish stock. It is, however, the case that these types of models do not capture many real world mixed fisheries, where species are bio-logical independent or dependent. The present paper considers cases where several non-cooperative exploiters are involved in mixed fisheries. This paper is targeting biodiversity preservation by setting up a two species model with the aim of ensuring both species survive harvesting of exploiters adapting a non-cooperative behaviour. The model starts out as a multi-species model without biological dependency and is then modified to include also biological dependency. We contribute to the literature by analytically finding the limits on the number of players preserving both species including the conditions to be satisfied. For visual purposes we simulate a two species model with different kind of interrelationship.

Allocation and sharing in international fisheries agreements

Abstract This paper provides an introduction to the allocation and sharing of benefits in international fisheries agreements. The reader is introduced to the concept of sharing the benefits from cooperative fisheries agreements and to several different sharing imputations. The paper summarises the lessons learned from the literature. In the literature review, several policy-relevant issues emerging from game theory and fisheries literature on the topic are identified.

The Role of Fisheries in Optimal Eutrophication Management

We analyze dynamically optimal eutrophication management using two controls, targeted fishing and reduction of external nutrient loads. Fishing removes nutrients from the water ecosystem, and the size of the fish stock also influences eutrophication through food web effects and other mechanisms. We show that fisheries have a role to play in cost-efficient water quality management in combination with external load reductions. Our numerical application considers phosphorus driven eutrophication, agricultural phosphorus abatement and fisheries targeted on cyprinids on a coastal bay in the Baltic Sea. The socially and privately optimal intensity of fishing efforts, phosphorus abatement and the resulting water quality are influenced by damages, revenues and costs. Furthermore, we show that the link between cyprinid fish stock and water quality, and the form of the fishing industry — sole owner or open access — have joint dynamics that lead to very different outcomes. A weak link between cyprinid stock and water quality is associated with socially optimal stock close to its maximum sustainable yield. This maximizes phosphorus removal. With a strong link, socially optimal stock and phosphorus removal are low. Coincidentally, open-access fishing sometimes yields socially desirable outcome automatically — a market failure in industry structure may counteract eutrophication.

International fisheries management and recreational benefits: The case of Baltic salmon

ABSTRACT This article studies how accounting for the benefits of recreational fisheries affects the formation and stability of an international fisheries agreement (IFA) on the management of Baltic salmon stocks. The interaction between four countries is modelled through a partition function game, under two scenarios. In the first scenario, countries take their participation decision for the IFA based only on the net present value of profits from commercial fisheries. In the second scenario, the net present value of the recreational benefits from angling is also considered. The results show that accounting for recreational benefits leads to the formation of the grand coalition, whereas only partial cooperation occurs when payoffs are confined to profits from commercial fisheries. JEL Codes: C70, F53, Q22.