The Economics of Fishing: Intertemporal Equilibria in a Two-Country Transboundary Resource

Abstract

For the problem of two-country fisheries sharing a common resource we calculate the precommitment solutions and address the time consistent ones. We analyse different initial states in order to obtain the optimal paths to reach a steady state. The two-agent problem is determine by the efficiency of each country and their discount rate, different levels of efficiency and discounting are set in order to find their relative consequences between both players. We find that the optimal path is depending on the other country behaviour, and that in the long run the final state may be different than the initial. The results of the model implementation may be extended to other type of renewable resources. This study is providing new insights in the two Player equilibria for the case of two agents transboundary fishing resource that may be used by policymakers facing fisheries management.