Market Power, Industrial Organization and Tradeable Quotas

Abstract

Individual Transferable Quotas (ITQs) wereintroduced into the Mid-Atlantic Surf Clam and OceanQuahog fishery to reduce over-capitalization whileconserving clam populations. Because the number ofoperators in the fishery declined drastically sincethe introduction of this policy, there is concernabout its effect on competitiveness. This paperutilizes Bertrand Pricing Models to show thatmonopoly power is absent from the surf clam andocean quahog markets. Concentration ratios, Lorenzcurves and Gini Coefficients estimated for thefishery for periods before and after ITQintroduction support the results of the Bertrand model.