Allocation Problems Between National and Foreign Fisheries with a Fluctuating Fish Resource

Abstract

The problem of allocating the rights to exploit fish resources between domestic and foreign fleets is posed in the context of a fluctuating fish stock. Such fluctuations are ubiquitous and are driven by the recruitment variation. A number of biological models are proposed to describe the dynamics of the resource. It is supposed that harvesting by both foreign and domestic fleets is permitted, and the possibilities for allocation between these two fleets are examined. The optimal allocation policy is derived for a number of different economic and biological situations. In many situations it will be optimal for there to be a mix of foreign and domestic fishing on the resource. This result implies that licensing and joint-venture agreements between coastal states and distant-water fishing nations may be desirable from the point of view of the coastal state, even in the long term.