Individual Quotas : A New Market Model for a Fishery

We propose a new intra-seasonal model for a fishery that allows for explaining both efficiency gains and welfare effects related to the introduction of individual quotas in fisheries previously operating as regulated open access. Our model is also suitable for analyzing international fisheries where one country decides to adopt new regulation meanwhile the other does not. We derive comparative statics which allows us to form some policy recommendations. We also calibrate our model so that it resembles the situation in North Pacific Halibut Fishery and test it against some empirical evidence as well as compare its results to results found in other research. We conclude that our model better describes reality than models used in previous research. We also simulate counterfactual outcomes which allow us to formulate further policy recommendations