The value of cooperation: An analysis of dynamic fishery games (based on a case study of the eastern Bering Sea pollock fishery)

Resource stocks which migrate across political boundaries, often referred to as transboundary resources, present a range of problems for management authorities. Among these problems is the fact that management incentives for such stocks can be difficult to ascertain. Despite the fact that one country or authority may have control over a resource stock while it is in their area of jurisdiction, the incentives for optimal management are disrupted by movement of the stock. Earlier works in this area (see Levhari and Mirman, 1980, Dockner, et al., 1989, and Dutta and Sundaram, 1990) show that a "Tragedy of the Commons" result in inevitable with transboundary resources. These studies also imply that this result might be mitigated through cooperative behavior. However, no effort is made in this literature to analyze the value of cooperation.; In the current work I evaluate analytically tractable dynamic fishery models and extend these models to analyze the value of cooperation. I show how the value of cooperation changes as the cost of fishing effort (and other parameters) changes. I then develop an illustrative case study around the Bering Sea pollock fishery. I carefully define the pollock market and discuss the appropriate econometric techniques for estimating the demand for pollock. I use the parameter values from the case study to analyze numerically the value of cooperation in a general welfare maximization model. Finally, I develop a dynamic programming algorithm to permit an analysis of sequential harvesting. I then analyze further the value of cooperation under the scenario of sequential harvesting.; Results from the analytic and numeric analyses are consistent. Both approaches show that increasing the cost of effort can decrease the value of cooperation. In the case of symmetric players. sequential harvesting also appears to decrease the level of overharvesting. Moreover, the value of cooperation appears to be "small." It may be true in many cases that the potential gains from cooperation would not be significant.