Sole Ownership and Common Property Under Management Flexibility: Valuation, Optimal Exploitation and Regulation.

Resumen

If one were to examine the institutional configurations under which real world fisheries operate, one would find virtually no fisheries operating under either pure open access or rent maximizing conditions. Instead, most of the world's most important fisheries operate under common property, although it implicates that the fishery operates in a socially suboptimal manner. This paper presents both a sole owner and an Individual Transferable Quota (ITQ) system models under management's flexibility (due to the high uncertainty attaching to the price of the fishing resource). In particular, the value of the fishery comprises not only the expected discounted value of the future cash flows but also the value of the option to shut down and restart the fishery. The sole owner model shows that the marginal productivity would be lower under management flexibility than without it, so that the optimal population level would be higher than the traditional one. The regulatory model shows that after having implemented the ITQ system, regulators must be goal oriented choosing an efficient property tax rate on the value of the fishery (given the economic parameters: risk free interest rate and convenience yield) so as to accomplish the efficient utilization of the resource for any quota price, at any point in time.