COOPERATIVE HIGH-SEAS STRADDLING STOCK AGREEMENT AS A CHARACTERISTIC FUNCTION GAME

Abstract

In the economic management of high-seas straddling fish stocks, we analyze the negotiation of a cooperative agreement by way of a characteristic function game (c-game). The benefits of a grand coalition may be distributed differently, depending on the negotiating members' harvesting efficiency and the concept of fairness chosen during negotiation. In the paper, we examine three such concepts: nucleolus, Shapley-value, and egalitarian. In general, a fleet's harvesting efficiency will determine the contribution it makes to any subcoalitions, or the grand coalition, in which it is the last to join. Analysis shows that the imputation to each member under each fairness concept differs according to whether the maximum, or the average, contribution is used, or whether the contribution can be regarded as bargaining power at all. By making certain assumptions regarding fleet efficiency, we calculated the exact imputation under each fairness concept and compared the change from one to another. Conclusions are then drawn with suggested further research.Institutional and Behavioral Economics, Resource /Energy Economics and Policy,