The Value of Information in a Congested Fishery

65 Pages Posted: 13 Apr 2022 Last revised: 29 Apr 2024

See all articles by Gabriel Englander

Gabriel Englander

World Bank - Development Research Group

Larry S. Karp

University of California, Berkeley

Leo K. Simon

University of California

Date Written: April 29, 2024

Abstract

We model a fishery with potential congestion; firms obtain both public and private signals about the location where the fish stock is densest. We extend existing theory by including a larger parameter region, correlation between public and private signals, and two types of information sharing. We analytically determine the regions of parameter space where greater precision of public and/or private information increases welfare. Using high-resolution data from the world's largest fishery, we estimate a structural model. Point estimates imply that more precise public information lowers industry profits, and more precise private information raises profits. This difference reflects the fact that public information increases congestion more than private information does. Making public only a small fraction of private information lowers welfare, but more extensive information sharing raises welfare. Welfare is much more sensitive to changes in the precision of private information than to changes in the precision of public information.

Keywords: value of information, fishery congestion, Peruvian anchoveta

JEL Classification: D83, Q22, Q28, Q56, O13

Suggested Citation

Englander, Gabriel and Karp, Larry S. and Simon, Leo K., The Value of Information in a Congested Fishery (April 29, 2024). Available at SSRN: https://ssrn.com/abstract=4072945 or http://dx.doi.org/10.2139/ssrn.4072945

Gabriel Englander (Contact Author)

World Bank - Development Research Group ( email )

Washington, DC 20433
United States

HOME PAGE: http://sites.google.com/view/gabrielenglander

Larry S. Karp

University of California, Berkeley ( email )

Dept. of Agriculture & Resource Economics
313 Giannini Hall
Berkeley, CA 94720
United States
510-643-8911 (Fax)

Leo K. Simon

University of California

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