UNIVERSITY of ALASKA ANCHORAGE
Voluntary Approaches to Transitioning from
Competitive Fisheries to Rights-Based Management:
An Experimental Analysis
or
Bringing the Field into the Lab
Gunnar Knapp
Jim Murphy
Dept. of Economics
UNIVERSITY of ALASKA ANCHORAGE
Evolution of fisheries management institutions
Institution
Characteristics
Problem
Open-Access
(Common Pool)
No regulation
Over-fishing
(“Tragedy of the
Commons”)
Dept. of Economics
UNIVERSITY of ALASKA ANCHORAGE
Evolution of fisheries management institutions
Institution
Characteristics
Problem
Open-Access
(Common Pool)
No regulation
Over-fishing
(“Tragedy of the
Commons”)
Regulated
Open-Access
Limit on total catch
Race for fish;
Excess inputs
Dept. of Economics
UNIVERSITY of ALASKA ANCHORAGE
Evolution of fisheries management institutions
Institution
Characteristics
Problem
Open-Access
(Common Pool)
No regulation
Over-fishing
(“Tragedy of the
Commons”)
Regulated
Open-Access
Limit on total catch
Race for fish;
Excess inputs
Limited entry
Input restrictions
Race for fish;
“Capital stuffing” of
unrestricted inputs
Dept. of Economics
Problems with Limited
Entry Management in
Alaska’s Bristol Bay Salmon
Fishery . . . Race for Fish
 Fishermen get in each
other’s way competing
for the best place to
catch fish (“Derby
fishing)
(Photograph by Bart Eaton)
Problems with Limited
Entry Management in
Alaska’s Bristol Bay
Salmon Fishery . . .
“Capital Stuffing”
New 32’ boat (1990s)
Old 32’ boat (1970s)
Although boats are
restricted to 32’ in length,
over time fishermen
have built wider and
taller boats in an effort to
catch a larger share of
the available fish.
Boat costs have
increased without any
corresponding increase
in catches.
(Photograph by Norm Van Vactor)
Evolution of fisheries management institutions
Institution
Characteristics
Problem
Open-Access
(Common Pool)
No regulation
Over-fishing
(“Tragedy of the
Commons”)
Regulated
Open-Access
Limit on total catch
Race for fish;
Excess inputs
Limited entry
Input restrictions
Race for fish;
“Capital stuffing” of
unrestricted inputs
Limits on individual
catches
(Individual quotas)
Allocation issues
(who gets the quotas?)
Transition issues
Rights-Based
Our Research Focus:
Voluntary Transition to Rights-Based Management
 APPROACH:
• Divide the total quota between a derby fishery and a rights-based
fishery
• Give fishermen a choice between fisheries
• Base quotas on the number of fishermen choosing each fishery
 LOGIC:
• Opportunity to demonstrate benefits
• “Win-win”
• Reduced opposition
 QUESTION:
• Does voluntary transition lead to easier and quicker adoption?
Experimental Methodology
Basic math of the derby fishery problem:
Standard profit max:
max pqi  ci  xi 
p
price of harvest
qi
individual harvest
xi
input choice
ci (xi) cost function
Maximizing profits in a derby
Standard profit max:
max pqi  ci  xi 
p
price of harvest
qi
individual harvest
xi
input choice
ci (xi) cost function
where:
 i xi
qi 
Q
 j x j
i
skill
Q
aggregate quota
Share of total harvest
1
2
3
4
5
6
7
1
9.56
6.23
4.56
3.56
2.90
2.42
2.06
2
12.46
9.13
7.13
5.79
4.84
4.13
3.57
3
13.69
10.69
8.69
7.26
6.19
5.35
4.69
4
14.25
11.58
9.68
8.25
7.14
6.25
5.52
64
65
66
67
68
69
70
-0.13
-0.13
-0.14
-0.14
-0.15
-0.15
-0.16
-0.27
-0.28
-0.29
-0.30
-0.30
-0.31
-0.32
-0.42
-0.43
-0.44
-0.46
-0.47
-0.48
-0.49
-0.57
-0.59
-0.61
-0.62
-0.64
-0.65
-0.67
My Input Choice
5
6
14.48
14.52
12.10
12.38
10.31
10.71
8.92
9.38
7.81
8.28
6.90
7.38
6.15
6.61
-0.74
-0.76
-0.78
-0.80
-0.82
-0.84
-0.85
-0.91
-0.93
-0.96
-0.98
-1.00
-1.03
-1.05
7
14.44
12.49
10.94
9.66
8.60
7.71
6.94
8
14.28
12.50
11.05
9.83
8.81
7.93
7.17
9
14.06
12.43
11.06
9.91
8.92
8.06
7.31
10
13.81
12.29
11.01
9.91
8.96
8.13
7.39
0.14
0.29
0.43
0.57
0.71
0.86
1.00
-1.09
-1.12
-1.14
-1.17
-1.20
-1.22
-1.24
-1.28
-1.31
-1.34
-1.37
-1.39
-1.42
-1.45
-1.47
-1.51
-1.54
-1.57
-1.60
-1.63
-1.66
-1.67
-1.71
-1.74
-1.78
-1.81
-1.84
-1.88
9.14
9.29
9.43
9.57
9.71
9.86
10.00
Average Input Choice of Other Group Members
Total Input Choice of Other Group Members
Potential experimental approach:
Nonlinear social dilemma payoff table
Concerns about payoff tables
 We don’t live in a world of payoff tables
• A lot of numbers, hard to read
• Too abstract??
 Frames how a person should think about the game
• May affect extent of cooperative behavior
 How to address heterogeneity of fishing skill?
Harvesting experiment
 8 subjects per group
 20 cups of beans in large bowl
 Revenue is $1/cup.
 Subjects need to purchase
“gear” to harvest the beans.
• Select a measuring cup
• Larger gear costs more.
Experiment supplies
Subjects harvest beans by
scooping them into a
pitcher on the floor
20 cups of pinto beans
Measuring scoops
Gear (measuring cups)
Cost of your harvesting scoop is:
Cost
Cost
Scoop Size
(cups)
(scoops)
(cups)
0.55
1/8
1.09
1/4
1.46
1/3
4.375
2.19
1/2
2.92
2/3
3.28
3/4
4.38
1
Amount of beans in the bowl
20.0 cups
Total
2.5 cups
Per Person
Experiment Summary:
3 treatments
4 sessions per treatment
16 rounds per session
Round
Practice
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Treatment Treatment Treatment
1
2
3
Skill
Skill
Skill
Skill
Skill
Skill
Derby
Derby
Derby
Choice
Choice
between between
Derby &
Derby &
Individual Individual
Quota
Quota
Skill
Derby video
An unanticipated but interesting result:
Significant rent dissipation occurs as beans are spilled
10
Mean = 27%
$5.40 per period spilled
0
5
(= $0.68/person)
10
20
30
Percent of Beans Spilled
40
50
0
5
10
15
20
25
There is wide heterogeneity in “fishing” skill, highly
correlated across rounds
.05
.1
.15
Share of Total Catch in the Skill Treatment
.2
We can predict catch shares accurately as a function of
“skill” and cup choices (we can estimate catch functions)
.2
.1
0
Share of Catch
.3
Share of Catch vs. Share of Power
0
.1
.2
Share of Power
.3
.4
Rent dissipation occurs through capital stuffing:
Subjects choose scoops larger than 1/8 cup
30
Distribution of Cup Choices
“Nash” Prediction (with
homogeneous subjects):
Percent
20
1/2 cup if no spills
0
10
1/3 cup if 25% spilled
0
1/8
1/4 1/3
1/2
Cup Size
2/3 3/4
1
15
20
Derby Earnings – Rents are almost fully dissipated
5
10
17% were < 0
0
Percent
Mean = $0.15
-3
-2
-1
0
EarningsUSD
1
2
Derby Summary
Predicted
(with no spills,
subject homogeneity)
Harvest / person
2.50
Cup size
1/2 cup
(cost=2.19)
Earnings
0.31
(16% efficiency)
Mean Observed
1.81 (73%)
Spills are an
externality
 1/3 cup
(mean cost=1.66)
0.15
(8% efficiency)
IFQ video
Voluntary transition: hypotheses
 Given the option to choose between a competitive
fishery and a quota fishery, some but not all
subjects will choose the quota fishery
 Over time, the number of subjects choosing the
quota fishery will increase
 Average gear use (harvest cost) will be lower in
both the quota and the competitive fishery than in a
competitive-only fishery
 Average profits will be higher in both the quota and
the competitive fishery than in a competitive-only
fishery
RESULTS:
Some but not all subjects chose the quota fishery.
Over time, the number of subjects choosing the quota fishery increased.
Average Number of Subjects Choosing Quota Fishery
(Average for four experiments, IHQ80 Treatment*)
8.0
7.0
number of subjects
6.0
5.0
4.0
*Beans were allocated
between bowls so that the
volume of beans per subject
was always 25% higher in the
competitive fishery than in the
quota fishery.
3.0
2.0
1.0
0.0
8
9
10
11
12
period
13
14
15
16
RESULTS: Average gear use (harvest cost) are lower in the quota fishery and (in
later periods) in the competitive fishery
Average Cup Size by Period
(Average for four experiments, IHQ80 treatment experiments)
0.50
0.45
Competive,
mandatory 1/4 cup
scoop
Average cup size
0.40
0.35
Competitive,
optional scoop size
0.30
0.25
Competitive bowl
0.20
0.15
Quota bowl
0.10
0.05
0.00
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16
period
RESULTS: Average profits are higher in both the quota and the competitive fishery
than in a competitive-only fishery
Average Earnings by Period
(Average for four experiments, IHQ80 treatment experiments)
2.50
Competive,
mandatory 1/4
cup scoop
Average earnings (cups)
2.00
Competitive,
optional scoop
size
1.50
Quota bowl
1.00
Average, both
bowls
0.50
Competitive
bowl
0.00
1
2
3
4
5
6
7
8
9
period
10 11 12 13 14 15 16