Operational tools and adaptive management

Applying the same optimisation procedure as in section 3.2.2 we get the following pair of
reaction functions for the two principals:
MS
MS F F MS
R
2
2 ( ) 2 ( )
t 1
(28)
R
MS
2
NGO
2
NGO
2
F
2
F
2
1
NGO
2
MS
2
NGO
2
F
2
F
2
F
NGO
( ) ( )
t (29)
F
2
where t R is the reaction function of the authorities and τ R of the NGOs, β and η are the costs of
formulating, implementing and obeying to the incentive scheme of the NGOs for the fishers
and the NGOs respectively.
Solving for the two reaction functions simultaneously gives the following first best solutions
to the tax/subsidy rates:
*
1
NGO
2
F
2 )(
MS
2
F
2
MS
2
MS
NGO
F
(
) ( ) ( )
t (30)
*
1
(
MS
2
F
2
)(
MS
2
NGO
)
F
2
NGO
2
The net incentive scheme is now given by
t
*
1
(32)
*
1
((
)
NGO
2
F
2
)(
MS
)
(
NGO
2
((
MS
)
NGO
2
MS
2
)
MS
2
NGO
2
MS
2
F
2
With two principals, the agent has (in theory) the possibility to accept, one, two or none of the
incentive schemes forwarded.
If U F0 >0, implying that it is better for the agent to accept at least one incentive scheme than
reject both, then
F
( t,
t , , )
F
U ( t,
t , 0,
0)
F
U ( 0,
0,
, ) . This means that there must
U 0 0
0
0
(
F
)
F
2
)(
NGO
2
exist a vector t , ) which fulfils the following three conditions:
t
0
F
2
0
Nqx
2a
( 0 0
F
3
F
1
F
1
E
M
j
pqx
4a
F
3
2
F
1
t
t
*
1
* 2
1
4a
2
F
2
F
1
* 2
1
Nqx
2a
2a
F
1
F
1
F
1
pqx
t
*
1
F
3
*
1
NGO
E
)
0
j
(
*
1
NGO
2
C
F
U
F0
MS
2
(31)
)(
69
F
(33)
)