1. “ Deep-Sea Fisheries Qualify as Endangered” In 1960s and 70s, shelf fisheries collapsed, shift from shelf to deep sea is now exhausting late-maturing species that recover only slowly 5 species of deep-sea fish decline over 17 year period in northwest Atlantic to qualify as critically endangered Biologists perceive this as urgent collapse Why are deep sea fish vulnerable? Late maturation, extreme longevity, low fecundity, slow growth Conclusion: conservation measures are necessary and lack of knowledge must not delay appropriate initiatives (ex: establishing deep-sea protected areas)

2. “Rapid Worldwide Depletion of Predatory Fish Communities” Prerequisite for restoration is understanding of composition and abundance of unexploded fish communities, relative to exploited ones Paper estimates trajectories of entire communities and estimates global rates of decline for large predatory fishes in shelf and oceanic ecosystems Result: industrialized fisheries reduced community biomass by 80% within 15 years, Declines of large predator fish will have serious consequences for ecosystems 1 st evidence of general pronounced declines of entire communities across widely varying ecosystems Effects: 1.Top down effects – what happens when predators are gone? 2.Possibility of extinction 3.Compromise sustainability of fishing

3. “Economic Theory of a Common Property Resource: The Fishery” by Scott Gordon Part 1: Biologists venturing into (murky) economic territory At time of paper, great deal know about biology of commercial fish species but little about economic characteristics Basic questions unknown: effect of fishing on stock of fish in sea (if there even is an effect) They came up with a “modern” formulation of the fisheries problem in terms of largest sustainable catch, but neglected costs of fishing

4. Part 2: Economic Theory of Fishery Graph: production function of effort Important theoretical point: fishery is not private property, thus rent yield by fishery is not capable of being appropriated by anyone Thought experiment: 2 different fishing grounds

5. “Structure of a Contract and Theory of a Non-exclusive Resource” by Cheung Externalities due to absence of the right to contract No contract governing resource use => alters constraint of competition and affects resource allocation Contract stipulates: 1.Distribution of income among participants 2.Conditions of resource use

6. Ex: in Marine Fisheries, right to use fishing ground is non-exclusive, right to contract is absent Result: intensity of fishing affected, cost of policing higher, affects decisions pertaining to planting and maturity A product with a low cost of guarding will be preferred Why do market contracts not exist? b/c of absence of exclusive rights or b/c transaction costs are prohibitive? Why do exclusive rights not exist? b/c of legal institutions or b/c policing costs are prohibitive?

7. In equilibrium, average product of fishing effort = wage rate (marginal factor cost) => no rent for fishing ground! How is it possible the marginal product of fishermen labor be lower than the wage rate? Under private ownership, MP = wage, with no contracts fishermen enter industry as long as residual is positive (analogous to Cournot Duopoly). Thus number of fishermen goes to infinity, each supplying a tiny amount of effort. Assumption: homogenous fishermen, but in real world, different productivities, costs to entry, institutional arrangements to limit entry (boat unions, legal restrictions).

8. “Contracting Problems and Regulation: the Case of the Fishery” by Johnson and Libecap Texas Shrimp Fishery Status: overcapitalized and catch per unit is falling Conflict btw on shore and inshore fishermen and btw inshore and Vietnamese refugee fishermen Regulations are incomplete, rent dissipation is uncontrolled Contracting costs high among heterogeneous fishermen (vary in fishing skill)

9. Part 1: Private agreements in absence of government support Dilemma: government frowns upon monopoly controls, desires common use by all citizens (egalitarian) Fishermen resort to: Informal contracts (unenforceable) Fishermen Unions – structured arrangement to restrict outsiders and police compliance, fix prices (violation of Sherman anti-trust laws)

10. Part 2: Heterogeneity Implications Without heterogeneity, all fishermen have an equal ability, net gains from effort controls are evenly spread out and rules are quickly adopted With heterogeneity of fishermen with respect to skill, limits on individual effort are extremely costly to agree and enforce (prevented both voluntary agreements and political mobilization in seeking government regulation) Uniform quotas draws opposition from more productive fishermen What are pros and cons of quotas, taxes, other management tools?

11. Part 3: Detail on Regulation in Texas Shrimp Fishery Since property rights and limiting entry were historically denied, catch enhancing policies are popular among politicians b/c they avoid controversial allocation schemes Ex: season closures, gear restrictions, min shrimp size. Are these optimal? Ex: taxes, quotas, other internal effort controls to protect stock of shrimp. Why are these unsupported by fishermen?