The new entrant problem in transboundary migratory fisheries and the importance of sunk costs

Sunk costs equal sunk boats?

Maarten J. Punt

Publikation: Konferencebidrag uden forlag/tidsskriftKonferenceabstrakt til konferenceForskningpeer review

Resumé

Climate change is likely to result in the uncertain relocation of fish stocks. As a result new players will emerge that compete for the resource. Although several authors have investigated this issue, most authors assume that entry is free. Although true for some fisheries, this ignores the fact that for other fisheries substantial sunk investments are needed. In this paper we investigate the effect of such sunk entry costs in a sequential fisheries. We model the uncertainty as a shock to the stock dependent fishing costs, in a two player game, where one of the players faces sunk entry costs. We find that, depending on parameters, sunk costs can i) increase the competitive pressure on the fish stock compared to a game where entry is free ii) act as a deterrence mechanism and iii) act as a commitment device. We conclude that entry costs can play a crucial role, and should not be ignored if they are thought to be present.
OriginalsprogEngelsk
Publikationsdato2016
StatusUdgivet - 2016
BegivenhedEighteenth Biennial Conference of the International Institute of Fisheries Economics and Trade: Challenging new frontiers in the global sector, a Northern Enlightenment - Aberdeen Exhibition and Conference Centre, Aberdeen, Storbritannien
Varighed: 11. jul. 201615. jul. 2016
http://www.iifet-2016.org/

Konference

KonferenceEighteenth Biennial Conference of the International Institute of Fisheries Economics and Trade
LokationAberdeen Exhibition and Conference Centre
LandStorbritannien
ByAberdeen
Periode11/07/201615/07/2016
Internetadresse

Fingeraftryk

Entry costs
Fisheries
Transboundary
Sunk costs
New entrants
Fish
Relocation
Climate change
Uncertainty
Costs
Deterrence
Resources
Fishing

Citer dette

Punt, M. J. (2016). The new entrant problem in transboundary migratory fisheries and the importance of sunk costs: Sunk costs equal sunk boats?. Abstract fra Eighteenth Biennial Conference of the International Institute of Fisheries Economics and Trade, Aberdeen, Storbritannien.
Punt, Maarten J. / The new entrant problem in transboundary migratory fisheries and the importance of sunk costs : Sunk costs equal sunk boats?. Abstract fra Eighteenth Biennial Conference of the International Institute of Fisheries Economics and Trade, Aberdeen, Storbritannien.
@conference{3dfc225705304807b0de0bb5e1669b3d,
title = "The new entrant problem in transboundary migratory fisheries and the importance of sunk costs: Sunk costs equal sunk boats?",
abstract = "Climate change is likely to result in the uncertain relocation of fish stocks. As a result new players will emerge that compete for the resource. Although several authors have investigated this issue, most authors assume that entry is free. Although true for some fisheries, this ignores the fact that for other fisheries substantial sunk investments are needed. In this paper we investigate the effect of such sunk entry costs in a sequential fisheries. We model the uncertainty as a shock to the stock dependent fishing costs, in a two player game, where one of the players faces sunk entry costs. We find that, depending on parameters, sunk costs can i) increase the competitive pressure on the fish stock compared to a game where entry is free ii) act as a deterrence mechanism and iii) act as a commitment device. We conclude that entry costs can play a crucial role, and should not be ignored if they are thought to be present.",
keywords = "entry deterrence, transboundary fish stocks, Game theory, entry costs, real options, sequential game",
author = "Punt, {Maarten J.}",
year = "2016",
language = "English",
note = "Eighteenth Biennial Conference of the International Institute of Fisheries Economics and Trade : Challenging new frontiers in the global sector, a Northern Enlightenment, IIFET ; Conference date: 11-07-2016 Through 15-07-2016",
url = "http://www.iifet-2016.org/",

}

Punt, MJ 2016, 'The new entrant problem in transboundary migratory fisheries and the importance of sunk costs: Sunk costs equal sunk boats?' Eighteenth Biennial Conference of the International Institute of Fisheries Economics and Trade, Aberdeen, Storbritannien, 11/07/2016 - 15/07/2016, .

The new entrant problem in transboundary migratory fisheries and the importance of sunk costs : Sunk costs equal sunk boats? / Punt, Maarten J.

2016. Abstract fra Eighteenth Biennial Conference of the International Institute of Fisheries Economics and Trade, Aberdeen, Storbritannien.

Publikation: Konferencebidrag uden forlag/tidsskriftKonferenceabstrakt til konferenceForskningpeer review

TY - ABST

T1 - The new entrant problem in transboundary migratory fisheries and the importance of sunk costs

T2 - Sunk costs equal sunk boats?

AU - Punt, Maarten J.

PY - 2016

Y1 - 2016

N2 - Climate change is likely to result in the uncertain relocation of fish stocks. As a result new players will emerge that compete for the resource. Although several authors have investigated this issue, most authors assume that entry is free. Although true for some fisheries, this ignores the fact that for other fisheries substantial sunk investments are needed. In this paper we investigate the effect of such sunk entry costs in a sequential fisheries. We model the uncertainty as a shock to the stock dependent fishing costs, in a two player game, where one of the players faces sunk entry costs. We find that, depending on parameters, sunk costs can i) increase the competitive pressure on the fish stock compared to a game where entry is free ii) act as a deterrence mechanism and iii) act as a commitment device. We conclude that entry costs can play a crucial role, and should not be ignored if they are thought to be present.

AB - Climate change is likely to result in the uncertain relocation of fish stocks. As a result new players will emerge that compete for the resource. Although several authors have investigated this issue, most authors assume that entry is free. Although true for some fisheries, this ignores the fact that for other fisheries substantial sunk investments are needed. In this paper we investigate the effect of such sunk entry costs in a sequential fisheries. We model the uncertainty as a shock to the stock dependent fishing costs, in a two player game, where one of the players faces sunk entry costs. We find that, depending on parameters, sunk costs can i) increase the competitive pressure on the fish stock compared to a game where entry is free ii) act as a deterrence mechanism and iii) act as a commitment device. We conclude that entry costs can play a crucial role, and should not be ignored if they are thought to be present.

KW - entry deterrence

KW - transboundary fish stocks

KW - Game theory

KW - entry costs

KW - real options

KW - sequential game

M3 - Conference abstract for conference

ER -

Punt MJ. The new entrant problem in transboundary migratory fisheries and the importance of sunk costs: Sunk costs equal sunk boats?. 2016. Abstract fra Eighteenth Biennial Conference of the International Institute of Fisheries Economics and Trade, Aberdeen, Storbritannien.