The Share System in Open-Access and Optimally Regulated Fisheries

Abstract

Although the share system is almost universal in fisheries throughout the world, it has received little treatment in the literature, the exceptions being papers by Zoeteweij (1956), Sutinen (1979), and Griffin, Lacewell, and Nichols (1976). The latter shows that a share system can divide the rent from the fishery between vessel owners and crew members. See Anderson (1982), however. This paper introduces the share system into the traditional static deterministic model of an exploited fishery, as described in Gordon (1954), Christy and Scott (1965), and Anderson (1977). The model will then be used to answer the following questions: (1) How is the share rate determined and how will it affect open-access fishing and the rents earned by boat owners and crew? (2) How will imperfect competition in the determination of the share rate affect open-access fishing and rent distribution? (3) What are the implications of the share system for management, and do they differ depending on how the share rate is determined? The next section will present the basic elements of this new model and use them to derive the results of the traditional model. The third section shows that if fishing effort can be produced using variable proportions and if the crew has some control over the input mix, then the least cost combination of inputs will not be used unless variable costs and revenues are shared at the same rate. The new model will be derived in the fourth section. The next few sections use the model to answer the above questions. A concluding section summarizes the main results and makes several generalizations from the conclusions. While it is generally agreed that a main purpose of the share system is to spread risks between boat owners and crews, the model presented here is deterministic. A stochastic model was not used because it would unnecessarily complicate the analysis without adding much to the essential points to be made.