INCENTIVE COMPATIBILITY OF FISH-SHARING AGREEMENTS: THREE STOCK MIGRATION MODELS

Shared fish stocks are such as migrate across borders between different countries’ exclusive economic zones. This paper discusses the incentive compatibility of fish-sharing agreements based on the zonal attachment of such stocks. Three types of migrations are considered: (i) a common stock that grows and reproduces and is then distributed in given proportions between two countries’ zones at the beginning of each fishing season; (ii) sub-stocks that breed and grow independently in their separate zones but spill over between zones according to relative abundance; (iii) a stock that grows and breeds in one country’s zone but migrates into the zone of another if it exceeds a certain size. It is shown that in all these cases the minor partner in a fish-sharing agreement may not have an incentive to cooperate unless he gets a larger share of the cooperative profits than corresponds to his share of the stock. This is particularly likely to happen when the unit cost of fish does not depend on the stock. An exception could occur if stock migration depends on the stock level; the major partner could then keep the entire stock by fishing it down to a critical level.