Rethinking Property Rights: Introducing Expected Quotas for Fisheries Management under Uncertainty

Abstract

"This paper proposes a new management tool called expected quotas. Each fisher is penalized if he goes beyond and rewarded if he goes below an allocated quota. The penalty is costlier than the reward. Dynamic programming calculations with uncertainties in the stock abundance estimate and fishermen's costs indicate that compared to regimes with fixed quotas, the use of expected quotas causes a substantial increase in the value of the fishery and reduces the risk of resource collapse. An efficient distribution of expected quotas is insured through a market-based system similar to the Individual Transferable Quota (ITQ) system."