Date of Award

2004

Degree Type

Dissertation

First Advisor

John M. Gates

Abstract

Quota management systems such as individual quotas (IQs) and individual transferable quotas (ITQs) are said to provide incentives for individual quota holders to conserve the resource voluntarily since increased stock by an individual fisherman's harvest reduction is shared by all other fishermen. To the extent that this is true if it is because quota holders expect the system to work and to be enforced. However, there is no obvious individual incentive to harvest less than the quota. Voluntary harvest reduction by one resource user is not compensated and this provides incentive for free riding under a traditional quota management system. Fishery resources are mobile in varying degrees, and individual resource users do not have their own growth function for own stock such as aquaculture or the hypothetical sole owner made famous by Gordon's paper (Gordon, 1954). In order to provide incentive for voluntary conservation, virtual populations are proposed. An economic agent (individual, port, region, etc.) is given sole right to manage its own virtual population. However, the recommended harvest levels (quotas under a quota management system) next year will be based not on the status of the real resource but on how that agent managed the virtual population with which it has been entrusted. Management using virtual populations has features of flexible quota management through virtual population units and this provides strong incentive to take into account the impact individual virtual population unit (VPU) holders impose on the total population and growth rate change. In this paper I develop an extension of Gordon's concept which I term the "Virtual Population (VP)". The essence of the land concept is that any legal entity can be assigned a "paper or virtual population". The holder of a VP is termed VPU. In this paper I apply a VPU regime to the Atlantic herring fishery in New England to illustrate numerically how multiple VPUs as economic agents might rationally allocate their efforts to optimize the present value of own profits and to measure the discrepancies from a sole owner solution.

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