AN EXPERIMENTAL EXAMINATION OF FISHERIES WITH CONCURRENT COMMON POOL AND INDIVIDUAL QUOTA MANAGEMENT

I. INTRODUCTION How user communities exploit and develop institutions to manage common pool resources attracts attention from across the social sciences (e.g., National Research Council 2002). Dynamic common pool resources such as aquifers, forest soils, and fisheries are a focus because of their potential to sustain income, and provide food and water security, particularly in traditional communities, and in vulnerable communities in the developing world (e.g., Arnason, Kelleher, and Willman 2009; Baland and Platteau 1996). Economic analyses have been directed primarily at identifying extraction levels that central planners can impose in order to maximize the highest sustainable flow of resource benefits (Conrad 2010; Wilen 2000), while political scientists, sociologists, and anthropologists have studied the governance structures that establish use norms and policies, and the conditions under which users can successfully manage the resource without central intervention (e.g., Agrawal 2002; Ostrom 2009). Recent trends in management have introduced economically significant examples of dynamic resources where a central planner constrains the full extent of the interseason externality, ensuring sustainable resource levels and extractions, but other externalities persist within seasons that have the potential to dissipate much of the rent. The most prevalent examples are in fisheries, where management agencies use biological fish stock assessments to establish a hard seasonal total allowable catch (TAC) for each fishery to ensure stock health. In many fisheries, "catch share" programs allocate shares of the TAC as quota to groups, or to individuals who then can or must form cooperatives, to manage intraseason externalities caused by concurrent production congestion, in-season growth patterns, or market timing. Interest is added because these groups, called sectors in many fisheries, are often self-identifying, and multiple sectors participate in each fishery; harvesters can affiliate around harvesting methods, management preferences, geography, or any other factor. On the one hand, this strategy could be a method for carving users into groups that meet Ostrom's (2009) conditions and thus supporting self-management of intraseason externalities (e.g., Cunningham and Bostock 2005; Aoki and Hayami 2001; Townsend, Shotton, and Uchida 2008; Wilson, Nielsen, and Dengbol 2003); on the other hand, it could be a technique for breaking political gridlock preventing more efficient economic management of the inter- or intraseason externalities (e.g., Acheson and Gardner 2011; Kuperan and Sutinen 1998). While such sectorization programs are thought to have many benefits such as an increase in legitimacy, incorporating local knowledge, and getting managers out of the business of setting individual allocations, prospective and retrospective economic analysis of these policies is difficult because, if different sectors choose different regulations, the fishery can be regulated by multiple management systems concurrently. This presents two significant challenges to analysts assessing the effects of such catch share programs. First, they must figure out not only how harvesters in each sector will respond to the harvesting strategies of others in their sector but also how the sectors will strategize against one another. Where contemporaneous congestion or price externalities are present, some sectors' rules might permit members to strategically adjust their harvesting behavior to respond to harvesting strategies of other sectors. Thus, a theoretical and empirical framework requires harvesters to make daily decisions that are subject to cumulative annual constraints within a dynamic game, with different types of players reflecting each sector. In addition, the counterfactual policy environment against which the sector program will be assessed must take into account the shifts in targeting and market timing behavior that not only reflect changes in the rules that apply to sector members but also the different rules under which harvesters are operating. …