Small Fish Wars: A New Class of Dynamic Fishery-Management Games

Two agents possess the fishing rights to a lake. Each period they have two options, to catch without restraint, e.g., to use a fine-mazed net, or to catch with some restraint, e.g., to use a wide-mazed net. The use of a fine-mazed net always yields a higher immediate catch than the alternative. The present catches depend on the behavior of the agents in the past. The more often the agents have used the fine-mazed net in the past, the lower the present catches are independent from the type of nets being used. Fishing without restraint may damage the fish stock and may even lead to exhaustion of the resource. This paper studies a family of models dealing with a wide range of effects of overfishing on the fish stock. A ‘tragedy of the commons’ can be averted, as equilibria sustain rewards well above the ‘tragedy rewards’. Moreover, sustainable Pareto-efficient outcomes can be supported by subgame perfect equilibria.