Operational tools and adaptive management

R
3
3
2
MS
2
MS
2
3
F
2
MS
2
3
MS
2
F
2
F
MS
( ) ( )
w z
(52)
3
F
2
R
z
MSC
3 2
MSC w F 3
MSC
2 (
F
)
MSC
F
2 (
MSC
)
F
(53)
2 2
2
2 2
2
From (52) and (53) we see that when constructing their incentive parameter each of the
principals “outdo” a share (less than one) of the incentive parameter formulated by the other
principal, before they make their own addition. The two principals now share all interests, of
which the environmental interests imply to deter (tax) effort and the economic (partly) and
social interests imply to promote effort. The difference between the two principals 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 pay off the principals has 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.
Solving for (52) and (53) simultaneously we get the equilibrium incentive parameters, given
by
MS F
MS MSC
MSC F MS
* 2 ( ) 2 2 ( ) ( 2 2
2 )( )
w (54)
3
3
3
MS
2
MSC
3 2
MS
2
2
2
3
3
MSC
2
NGO
2
3
MSC F
MS
MS
F MSC
* 3 1 ( ) ( ) ( 3 2 3 2 )( )
z (55)
This means that the net incentive scheme, which the fishers face is given by
z
*
w
*
3
(
MS
2
(
2
3
)
3
F
2
)(
MSC
)
3
3
(
F
2
F
2
3
MS
2
MSC
2
2
3
MS
2
MSC
2
When assuming that the costs to the sardine fishers of being regulated by the authorities does
not differ much from the costs of being regulated by the MSC, i.e. 2 3 , the first and the
last right hand term have a negative sign. Given the definition of ( ), g MS,
MSC
g
(see
appendix), this implies that the net incentive scheme increases in the environmental interests
of the principals, and decreases in the economic and social interests. In contrast, the middle
right hand term shows that the incentive scheme decreases in the environmental interests of
the sardine 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 much, 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.
)(
F
3
)
(
F
2
MSC
2
(
3
2
)
(56)
74
F
2
)(
MS
)