Abstract
Whereas rights-based catch regulations such as individual transferable quotas (ITQs) are gaining traction as the key management instrument in many fisheries, most fisheries are additionally regulated by gear restrictions, minimum landing sizes, and similar measures that intend to protect young fish from being caught. Here we study the incentives to fish selectively in a second-best setting, where the regulator issues quotas of different types and fishers choose the size of the fish they catch. We find that if quotas are specified in terms of the number of fish, rather than biomass or weight, fishers have substantial incentives to target larger fish. Thus juvenile fish are protected without need for gear restrictions. We develop the economic principles in an analytical model and quantify results for empirical examples. We find that steady-state profits under second-best deregulated number quota management are only 0.1%–2.1% below the first-best optimum.
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