Operational tools and adaptive management

Then we have a situation with two symmetric principals, both aiming at individually and
simultaneously regulating a specific fishery. Symmetry means that they both hold
environmental as well as economic and social interests towards the fishery under
consideration.
Let the incentive schemes of the two principals (authorities and the MSC) be given by
z zE ), ( , E )
( 0 j 0 j respectively.
Then, when both principals take into consideration the existence of a second principal which
also exert influence upon the effort applied in the specific fishery, their optimal tax/subsidy
parameters will have the characteristics as given in table 3.15.
Table 3.15 Optimal tax/subsidy rates when there are two principals to have a say in the
management of the sardine purse seine fishery relative to when the fishery is
managed by the authorities alone
Variable z* ω* z*+ω*
Relationship z*ω* > 0 z*+ω*>w*
where ω S is the tax/subsidy rate the MSC would set had it not taken into consideration the
authorities‟ regulation of the same fishery.
Table 3.15 shows that both principals moderate their tax/subsidy rate when they take into
consideration that there is an additional principal regulating the fishery. However, the net
incentive scheme is higher compared to what the authorities would have set were they the
only principal.
When constructing their incentive schemes each of the principals “outdo” a share (less than
one) of what the other principal put into her/his incentive scheme, before they make their own
addition. This means that the incentive schemes are mutually dependent of each other. The
two principals are now symmetric in the sense that they share all interests. The difference
between the two them is their motivation to deter or promote effort. This is decided by the
weights of the three interests in the principals‟ objective functions (the λs), and different
weights imply different motivations to deter and promote effort. Each principal has to balance
how much to deter and how much to promote effort in their own incentive scheme and at the
same time take into account the effects on effort of the incentive scheme of the other
principal. This is a trade-off between the costs of operating the incentive scheme and the payoff
the principals have from harvest (effort) from the fishery. In this trade-off both principals
give and take, and they correct for differences in the weights of their interests, and thus
different preferred effort levels, by taking out parts of what the other principal has put into the
scheme.
The tax/subsidy rate of each principal increases in the environmental interests of the
principals, and decreases in the economic and social interests. In contrast, it decreases in the
environmental interests of the fishers and increases in their economic and social interests.
These are reasonable results as the more environmentally concerned the fishers are the more
they will restrict effort and thus harvest in order to fish sustainably, and then a high tax is not
necessary to limit effort. On the other hand, when the fishers are mainly economically
concerned they will have an incentive to fish a lot, i.e. apply much effort in order to increase
income. Then a high tax on effort may be necessary to limit the effort, and thus harvest.
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