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Undergraduate Research Project Management System

Value-Driven Rent Dissipation in Fisheries: Losing Money by Racing for Fish

Status Current
Seeking Researchers No
Start Date 11/01/2009
End Date 06/30/2010
Funding Source Undergraduate Research Grant
Funding Amount 1,990
Community Partner
Related Course
Last Updated 01/12/2010 03:46PM
Keywords derby, fishery, value-driven rent dissipation

People

Faculty
  Gunnar Knapp, James Murphy

Student Researchers
  Gabe Dunham, Joel Ainsworth

Abstract

In a derby style fishery, fishermen compete against one another for fish. Derbies create problems in some fisheries, such as the Bristol Bay salmon fishery, primarily because of the way the industry is regulated and managed. Most of the policy research in this area has focused on how the regulatory structure of derby fisheries leads to excessive investment in inputs, which can substantially reduce the earnings of fishermen. This phenomenon is known as cost-driven rent dissipation. However, there is another potentially significant source of rent dissipation that has received far less attention. Value-driven rent dissipation can occur when fishermen receive a lower price for their product, perhaps due to a lower quality. Since value-driven dissipation is an implicit cost, by nature it can go unnoticed by market participants.

The goal of this proposed research is to use the tools of experimental economics to study the value-driven rent dissipation phenomenon. We will modify and extend previous experimental research that was motivated by the Bristol Bay salmon fishery. By studying human behavior in a controlled laboratory setting, we hope to provide some insight into the magnitude of unrealized value by participants in a derby style fishery. Understanding the extent of this value-driven dissipation will have important implications for fisheries management in Alaska and worldwide.

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