2002 World Congress of Environmental and Resource Economists

I model incidental harvest in a two-species renewable resource as a stochastic process and allow for discarding of catch, an issue that has rarely been addressed in a dynamic setting. I describe the strategic interaction between a social planner and two types of harvesters, one of which imposes a "technological externality" (bycatch) on the other. Using a representative agent model of harvester behavior, I compare the relative performance of various regulatory instruments meant to elicit efficient levels of bycatch and discarding: price instruments, physical trip limits, and value-based quotas. I demonstrate analytically and graphically that, ignoring costs of implementation, price instruments dominate both types of quotas. With numerical simulations, I show the relative performance depends upon various factors, including the nature of the bycatch process, differences in the market (ex-vessel) prices of the stocks, relative efficiency of the two types of harvesters, and fixed costs associated with resource extraction.



	Paper Title:	Implications Of Asymmetric Information And Uncertainty For The Economics Of Bycatch And Discarding
	Presenting Author:	Guillermo E Herrera (Bowdoin College)
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	Abstract:	I model incidental harvest in a two-species renewable resource as a stochastic process and allow for discarding of catch, an issue that has rarely been addressed in a dynamic setting. I describe the strategic interaction between a social planner and two types of harvesters, one of which imposes a "technological externality" (bycatch) on the other. Using a representative agent model of harvester behavior, I compare the relative performance of various regulatory instruments meant to elicit efficient levels of bycatch and discarding: price instruments, physical trip limits, and value-based quotas. I demonstrate analytically and graphically that, ignoring costs of implementation, price instruments dominate both types of quotas. With numerical simulations, I show the relative performance depends upon various factors, including the nature of the bycatch process, differences in the market (ex-vessel) prices of the stocks, relative efficiency of the two types of harvesters, and fixed costs associated with resource extraction.
	Link to paper:	Not available

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

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