TITLE:
Fishery Fee and Tax Rate in an Oligopoly Industry with Entry and Exit
AUTHORS:
Yu Shao, Kai Shen, Weiru Zhang, Shuntian Yao
KEYWORDS:
Fisheries Management; Fishing Fee; Non-Cooperative Game Theory; Entry and Exit; Optimal Tax Rate; Social Welfare
JOURNAL NAME:
Theoretical Economics Letters,
Vol.3 No.5A,
August
26,
2013
ABSTRACT:
Over the
last two decades, fisheries sector has been playing an important role in the
global economy as a vibrant sector. By looking into the interactions among
natural resources, human beings and government, this paper first briefly examines
the issue of complicated conflicts in fisheries together with its influence on
fisheries management. Under the assumption that the fishing resources will not
be exhausted, this paper further reveals the particular conflicts between
economic performance and community welfare by modelling the strategic
interaction amongst the government and fishing firms based on the two stage
non-cooperative game theory. With a dynamic model enclosed, this paper demonstrates
with how the government establishes the fishing fee rate to achieve its primary
goal and how the fishing firms react to the policy in each scenario. In the
end, it concludes with some brief suggestions regarding policy-making for
future work priorities. Although fishery industry is used as an example in this
article, our main results, however, can be applied to any industries of
oligopoly competitions with entry and exit.