Spatial structure and informational asymmetry in the economics of multiple stock renewable resources
The open-access inefficiencies of renewable resources are heightened, and their regulation complicated, by heterogeneous stock composition, non-uniform spatial distribution, and informational asymmetries between regulators and those involved in resource extraction. These issues continue to provide fertile ground for theoretical and empirical research. The uncertainty inherent in the catch composition in multispecies fisheries, for example, has been largely ignored by the literature, though it has important implications for the efficacy and relative merits of different types of regulation. In this dissertation, I present two papers which extend the literature on multiple stock renewable natural resources.In the first paper, I consider a two-species system in which the stocks are differentially distributed across space (or "depth"). I develop an analytical model as well as a numerical algorithm for solving for optimal dynamic behavior, and show how the benefits of spatially structured regulation vary with economic and biological parameters as well as the distribution of stocks across space.In the second paper, I consider incidental harvest, or "bycatch" as a stochastic process and allow for discarding of catch, an issue not yet addressed in a dynamic setting. I describe the strategic interaction between a social planner and two different types of harvesters, one of which imposes a "technological externality" on the other. Using a disaggregated or "representative agent model," I compare the relative performance of various regulatory instruments meant to control bycatch and discarding: price instruments, vessel quotas (trip limits), and value-based quotas. I show that the relative performance of these instruments depends upon various factors, including the nature of the bycatch process, differences in the market (ex-vessel) prices of the stocks, the relative efficiency of the two types of harvesters, and the magnitude of fixed costs associated with resource extraction.
- Economics