2002 World Congress of Environmental and Resource Economists

Very little principal-agent analysis under imperfect information has been done within the fisheries economic literature. However, in reality the regulatory authorities have imperfect information about stock, catches, costs and catchability coefficients. This paper conducts a principal-agent analysis of fisheries under the assumption that an adverse selection problem (imperfect information about an exogenous cost parameter) arises. A subsidy on effort is studied as the regulatory device in order to keep the principal-agent analysis as simple as possible. Within a standard principal-agent model, the low cost agent must be allowed the same level of effort as under complete information. This conclusion does not hold for fisheries because of a resource restriction and the fact that maximisation takes place over two variables. By means of comparative static analysis, this paper argues that the low cost agent must be allowed a larger effort than under complete information. Classification: D2, Q2, L5.



	Paper Title:	A Principal-Agent Analysis Of Fisheries
	Presenting Author:	Niels Vestergaard (University of Soutjern Denmark)
	Coauthor 1:	Frank Jensen
	Coauthor 2:
	Coauthor 3:
	Abstract:	Very little principal-agent analysis under imperfect information has been done within the fisheries economic literature. However, in reality the regulatory authorities have imperfect information about stock, catches, costs and catchability coefficients. This paper conducts a principal-agent analysis of fisheries under the assumption that an adverse selection problem (imperfect information about an exogenous cost parameter) arises. A subsidy on effort is studied as the regulatory device in order to keep the principal-agent analysis as simple as possible. Within a standard principal-agent model, the low cost agent must be allowed the same level of effort as under complete information. This conclusion does not hold for fisheries because of a resource restriction and the fact that maximisation takes place over two variables. By means of comparative static analysis, this paper argues that the low cost agent must be allowed a larger effort than under complete information. Classification: D2, Q2, L5.
	Link to paper:	Not available

	Session / Day / Time	2D / Monday / 10:15 - 11:45 am

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