Strategic Interactions Between Fishermen And A Coastal Nation

Abstract

Coastal nations can impose conditions of use on foreign fishermen that operate in their Exclusive Economic Zone. We develop a game-theoretical model in which a fishery owner maximizes the revenue that it collects from fishermen that operate in its EEZ by charging them a fishing fee. We find that if the number of fishermen is exogenous the owner selects a fee that is higher than socially optimal. On the other hand, if the owner can choose the number of fishermen, it does not restrict entry to the EEZ and selects a fee that maximizes net return. Alternatively, the owner can use a two-tier tariff to extract all the net return from the fishery.