Cooperative and non-cooperative harvesting in a stochastic sequential fishery

We examine cooperative harvesting in a sequential fishery with stochastic shocks in recruitment. Two fleets harvest in a stochastic interception fishery. We analyze cooperative management as a non-cooperative game, where deviations from cooperative harvesting are deterred by the threat of harvesting at non-cooperative levels for a fixed number of periods whenever the initial stock falls below a trigger level. We illustrate the sequential harvesting game with an application to the Northern Baltic salmon fishery. Cooperative harvesting yields participants substantial gains in terms of expected payoffs. The greatest gains accrue to the fleet harvesting the spawning stock, the actions of which are not observed by the competitor. An explanation for the prevalence of fish wars is provided: even if a cooperative agreement is reached, shocks in recruitment trigger phases of non-cooperative harvesting. Further, the cooperative solution can only be maintained when stock uncertainty is not too prevalent.