Rent distribution in an ex-vessel auction market of fisheries

Keita Abe, Yusuke Matsuki, Gakushi Ishimura, Shunsuke Managi

Research output: Contribution to journalArticlepeer-review

Abstract

While the rent generation for harvesters in common property resource exploitation has been well studied, questions about the rent distribution between the resource users and the downstream sector remain. We study the effects of information asymmetry on the distribution of rent between harvesters and buyers in the ex-vessel fish market and discuss the implication on the outcomes of natural resource management. Under a first-price sealed-bid auction of the fish-by-fish firsthand market in Japan, the markdown gained by buyers is estimated using a structural auction model with a nonparametric method. The results suggest that auction winners enjoy considerably high markdown (48% on average) from market transactions in fish. In a market in which asymmetric information drives down the price, the markdown can work as a resource management tax and disincentivize harvesters from overfishing and overinvesting. This “unintended tax” should be recognized in the design of public policy because a policy that changes the equilibrium may affect the trade-off between marginalized low-income harvesters and the abundant resource stock.

Original languageEnglish
Article number104771
JournalMarine Policy
Volume133
DOIs
Publication statusPublished - Nov 2021

All Science Journal Classification (ASJC) codes

  • Aquatic Science
  • Environmental Science(all)
  • Economics and Econometrics
  • Management, Monitoring, Policy and Law
  • Law

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