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Posted price offers and first price auctions, along with the multi-unit discriminatory auction extension, are two widely used mechanisms for allocating conservation contracts. The choice between the two typically hinges on the trade-off between the posted price's simplicity and the potential revenue gains of the auction. In this paper we introduce a novel mechanism that attempts to bridge the gap between the performance of posted price offers and auctions. A two-price and lottery schedule combines the simplicity of the former with some of the flexibility of the latter. Using a model that incorporates agents' cognitive and information costs of bidding, we analyze how the ranking of allocative efficiency and cost-effectiveness between the mechanisms varies as the wedge of participation costs increases. When the number of bidders is endogenously determined by participation costs, bid shading associated with a lack of competition in the auction compromises its cost-effectiveness vis-a-vis the posted price and the lottery schedule. We use data from three recent buybacks for fishing licenses conducted in Maryland to calibrate our model and identify conditions under which the two-price schedule outperforms the other mechanisms.

This article studies how rent-seeking behavior induces an informal leasing market for fishing licenses that leads harvesters in a common pool to circumvent rules set by the manager to conserve the resource, as well as how the vulnerability of the resource to such behavior depends on the management approach adopted. License leasing reduces fleet heterogeneity in terms of catch per unit effort as demonstrated by the outward shift in the stochastic production frontier. While aggregate harvest is invariant to alternative profiles of fleet heterogeneity in quota-managed fisheries, the productivity of the restricted variable--total effort--increases with the number of leasing contracts in input-controlled fisheries. If unanticipated by the regulator, the additional pressure on the resource may lead to overfishing and compromise the long-term viability of the industry. Copyright 2013, Oxford University Press.

Marine scientists and policymakers are encouraging ecosystem-based fishery management (EBFM), but there is limited guidance on how to operationalize the concept. We adapt financial portfolio theory as a method for EBFM that accounts for species interdependencies, uncertainty, and sustainability constraints. Illustrating our method with routinely collected data available from the Chesapeake Bay, we demonstrate the gains from taking into account variances and covariances of gross fishing revenues in setting species total allowable catches. We find over the period from 1962–2003 that managers could have increased the revenues from fishing and reduced the variance by employing EBFM frontiers in setting catch levels.

A multinomial logit discrete choice model is estimated using data collected from a survey of documented boat owners to examine the factors that determine the boater's choice of state of principal use. Travel time and perceived boating quality significantly influence boater choice, but excise taxes that must be paid depending on the state in which the boat is located only negatively influence location choice at extremely high tax levels and only for high income boaters. It is unlikely that a state such as Maryland, which has a relatively high excise tax rate on boaters, could entice more boaters to keep their boats there, simply by lowering the tax rate from 5% to 4%. A more effective means of attracting boaters would be to maintain or improve coastal quality and make potential boaters aware of the improvement.

Regulation of fisheries production together with public promotion of fisheries products offer a potentially profitable environment for fishermen. Yet production restrictions are usually insufficient to prevent entry, causing depletion of the resource base and dissipation of long-run profits from promotion. Shorter run gains may be possible, providing producer response to advertising is not instantaneous. Lagged biological and economic responses appear to provide a rationale for pulsed advertising. Moreover, a pulsed advertising policy is shown to mitigate the adverse effects on the resource base which would normally accompany expansion of consumption without direct production control.

Fishing costs are dependent on the size of the fish stock and regulations. Changes in these factors alter the equilibrium industry structure. In a multiproduct fishery, it is not possible to generalize how a reduction in industry catch will be accomplished, through a reduction in catch per vessel or in the number of vessels. Multiproduct cost functions are estimated for the Atlantic clam fishery. Simulations reveal that optimal harvest would be achieved with an increase in the number of vessels and a decrease in the catch per vessel of surf clams and an increase in the catch of ocean quahogs.

This paper extends previous fisheries models by generalizing the necessary and sufficient conditions under which coexistence of specialized and generalized vessels occurs in a multispecies fishery. Economies of scope and demand conditions are argued to dictate coexistence. Inefficiency in market structure is also shown to arise with an inappropriate property rights regime.