Sharing a fish resource: Bargaining theoretical analysis of an applied allocation rule

Abstract

Besides fish-stock considerations, fisheries managers must often take into account competing heterogeneous harvest groups. A long-run allocation rule in a fishery decides more than just shares to the interested parties, it must also take into account the dynamic questions regarding how to divide a changing stock, between changing harvesting groups. Using the axiomatic approach in bargaining theory, we analyse two resource allocation rules that were consecutively implemented in the Norwegian cod fishery in order to distribute the allowable catch between coastal vessels and trawlers. The two allocation rules are compared with one another and with existing theoretic bargaining solutions. The actual allocation rules show little likeness to the well-known Nash bargaining solution, while there are some similarities to the less familiar Salukvadze solution, since shares vary for changing total allowable catch. The Generalised Nash bargaining solutions using man-years as relative weights, is closest to the actual allocations. The trawlers are shown to gain from the change in actual allocation rule at the expense of the coastal vessels.