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http://ssrn.com/abstract=1740455
 
 

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Efficiency Advantages of Grandfathering in Rights-Based Fisheries Management


Gary D. Libecap


University of California, Santa Barbara - Donald Bren School of Environmental Science & Management; University of Arizona - Karl Eller Center; National Bureau of Economic Research (NBER); PERC - Property and Environment Research Center

Ragnar Arnason


University of Iceland

Terry L. Anderson


PERC - Property and Environment Research Center

December 1, 2010

ICER Working Paper No. 31/2010
PERC Research Paper No. 12/10

Abstract:     
We show that grandfathering fishing rights to local users or recognizing first possessions is more dynamically efficient than auctions of such rights. It is often argued that auctions allocate rights to the highest-valued users and thereby maximize resource rents. We counter that rents are not fixed in situ, but rather depend additionally upon the innovation, investment, and collective actions of fishers, who discover and enhance stocks and convert them into valuable goods and services. Our analysis shows how grandfathering increases rents by raising expected rates of return for investment, lowering the cost of capital, and providing incentives for collective action.

Number of Pages in PDF File: 32

Keywords: Fishing rights, property rights, allocating fishing rights, grandfathering fishing rights, auctions

JEL Classification: N 22, Q0, Q22, K11, D23

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Date posted: January 17, 2011 ; Last revised: June 15, 2012

Suggested Citation

Libecap, Gary D. and Arnason, Ragnar and Anderson, Terry L., Efficiency Advantages of Grandfathering in Rights-Based Fisheries Management (December 1, 2010). ICER Working Paper No. 31/2010; PERC Research Paper No. 12/10. Available at SSRN: http://ssrn.com/abstract=1740455 or http://dx.doi.org/10.2139/ssrn.1740455

Contact Information

Gary D. Libecap (Contact Author)
University of California, Santa Barbara - Donald Bren School of Environmental Science & Management ( email )
4670 Physical Sciences North
Santa Barbara, CA 93106-5131
United States
805-893-8611 (Phone)
HOME PAGE: http://www.esm.ucsb.edu/people/usernew.asp?user=glibecap
University of Arizona - Karl Eller Center ( email )
McClelland Hall
Tucson, AZ 85721-0108
United States
520-621-4821 (Phone)
520-626-5269 (Fax)
HOME PAGE: http://www.bpa.arizona.edu/~libecap
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
PERC - Property and Environment Research Center
2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

Ragnar Arnason
University of Iceland ( email )
Iceland
Terry L. Anderson
PERC - Property and Environment Research Center ( email )
2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States
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