A theoretical analysis of information networks in the fishery

approved: -^^ "T\ " Richard S. Johnston \ The mathematical theory of information provides a rich basis for the analysis of information systems. Through the definition of communications systems and their parts as probabilistic entities, information theory provides the means to quantify and measure information as a means to uncertainty resolution. Information measured in this context is value-free; the addition of economic theory to information theory offers a means to understanding both the content and the value of information in the fishery. Information acquires value under scarcity conditions of uncertainty. The value of information to the fisherman lies in the increased probability of reaching a desired payoff. The value of pooled information to increased search efficiency is dependent on scale economies. Information networks are a frequently observed phenomenon in open access fisheries characterized by high levels of uncertainty. Although various interpretations have been given to the function an information network serves, the particular focus of this paper is on information as a capital asset in a fishing system. As the fishing system becomes more complex with an increasing number of states, system entropy increases; the value of information as a producer of income also increases. Differences in skill, measured by differential abilities to produce information, result in differences in search costs and income between fishermen. The information produced by each fisherman is a bonus to fishing that, allows the possibility of a network of exchange. An information network in a fishery may be viewed as a production mechanism that reduces transactions costs. In a limited sense, the information network establishes property rights to the fishery by dividing the fishing ground into territories. Uncertainty provides incentives for a market for information. The existence of adaptations that modify the open access condition suggests that the relationship between property rights and use levels may not be causal under conditions of uncertainty. Conditions of uncertainty also raise questions about the appropriateness of standard efficiency evaluations in the fishery. Differential skill in information production emphasizes the contribution of skill to fishing effort. The distinction between real and nominal effort allows a cooperative effect in the application of effort which makes the prediction of fisherman response to a particular policy prescription a complex task. Incentives to adopt various control mechanisms in the fishery ;can be directly related to the type and level of entropy faced by decision makers. An individual fisherman interested in maximizing the return on his investment of effort will resist any restrictions on open scramble competition. A management agency, however, has strong incentives to resist scramble competition. The presence of noise in the transmission process affects the acquisition of information and hence the resolution of uncertainty. The existence of fact or rule uncertainty may have a significant impact on the success of policy implementation. Hypotheses related to the impact of uncertainty on fishermen are generated for testing in the next phase of research. A Theoretical Analysis of Information Networks in the Fishery