Abstract
Regulator uncertainty is decisive for whether price or quantity regulation maximizes welfare in fisheries. In this paper, we develop a model of fisheries regulation that includes ecological uncertainly, variable economic uncertainty as well as structural economic uncertainty. We aggregate the effects of these uncertainties into a single welfare measure for comparing tax and quota regulation. It is shown that quotas are always preferred to fees when structural economic uncertainty dominates. Since most regulators are subject to this kind of uncertainty, this result is a potentially important qualification of the pro-price regulation message dominating the fisheries economics literature. We also believe that the model of a fishery developed in this paper could be applied to the regulation of other renewable resources where regulators are subject to uncertainty either directly or with some modification.
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