A model of rational equilibrium in quota‐regulated multiple‐species fisheries

Abstract

This paper derives rational ecological–economic equilibrium outcomes—capital and variable input allocations, harvests, discards, revenue, costs, and stock abundances—in a spatially heterogeneous, multispecies fishery that is regulated with individual fishing quotas (IFQs). The production setting is decentralized; a manager chooses species‐specific, seasonal, and spatially nondelineated quotas. Industry controls all aspects of harvesting operations. We present a solution concept and computational algorithm to solve for equilibrium harvests, discards, and profits across species, space, and time (within the regulatory cycle). The rational equilibrium mapping that we derive, used recursively, can be used to implement management‐preferred bioeconomic outcomes. The model offers an essential IFQ regulation‐to‐outcome mapping that enables more precise implementation of management goals in multiple‐species and heterogeneous fishery settings.