Renewable resource management under asymmetric information: the fisheries case

TY - JOUR

T1 - Renewable resource management under asymmetric information

T2 - the fisheries case

AU - Jensen, Frank

AU - Andersen, Peder

AU - Nielsen, Max

N1 - Published online 11 Dec 2013

PY - 2013

Y1 - 2013

N2 - Asymmetric information between fishermen and the regulator is important within fisheries. The regulator may have less information about stock sizes, prices, costs, effort, productivity and catches than fishermen. With asymmetric information, a strong analytical tool is principal-agent analysis. In this paper, we study asymmetric information about productivity within a principal-agent framework and a tax on fishing effort is considered. It is shown that a second best optimum can be achieved if the effort tax is designed such that low-productivity agents rent is exhausted, while high-productivity agents receive an information rent. The information rent is equivalent to the total incentive cost. The incentive costs arise as we want to reveal the agent's type.

AB - Asymmetric information between fishermen and the regulator is important within fisheries. The regulator may have less information about stock sizes, prices, costs, effort, productivity and catches than fishermen. With asymmetric information, a strong analytical tool is principal-agent analysis. In this paper, we study asymmetric information about productivity within a principal-agent framework and a tax on fishing effort is considered. It is shown that a second best optimum can be achieved if the effort tax is designed such that low-productivity agents rent is exhausted, while high-productivity agents receive an information rent. The information rent is equivalent to the total incentive cost. The incentive costs arise as we want to reveal the agent's type.

U2 - 10.1080/2164828x.2013.859578

DO - 10.1080/2164828x.2013.859578

M3 - Journal article

SN - 2164-828X

VL - 9

SP - 37

EP - 46

JO - Food Economics

JF - Food Economics

IS - Supplement 5

ER -