Optimal Fisheries Management using Transferable Shares of a Convex Tax

In this paper, we propose a fishery control scheme which happens to be first best efficient in the context of a Gordon-Schaefer model where asymmetric information about effort/harvesting costs is present. It is widely acknowledged that in the absence of regulations, competition between vessels leads to a competitive game wherein the outcome is inefficient. We introduce a management scheme that regulates the fishing industry through a convex tax on effort. The shares of this tax can be traded in a market, thus solving problems related to asymmetric information. This can be achieved since heterogeneous fishing firms are individually stimulated to solve the same optimality problem as a social planner would. We apply this model to the Northwest Mediterranean demersal fishery as a case study.