Quotas or permits are frequently used in the management of renewable resources and emissions. However, in many industries there is concern about the basic effectiveness of quotas due to noncompliance. We develop an enforcement model of a quota-regulated resource and focus on a situation with significant non-compliance and exogenous constraints...
In this paper, a dynamic model of fishermen’s compliance is developed and used to analyse
several issues. There are two parties involved in the fishery; the regulator and the fishermen.
Regulator takes on a long term view and sets quota at the beginning of every period in order
to maximise...
Production quotas can restore efficiency in industries characterized by production externalities, such as resource industries and industries with environmental regulations. However, with imperfect quota enforcement, firms may have incentives to build up excess capacity relative to their quotas. Firms with excess capacity may, in turn, have stronger incentives to violate...
Illegal extraction is a serious issue in many renewable resource industries, such as fisheries and forestry. This traditional approach is to model the resource firm as one cohesive unit or an individual. However, in many cases violations are not committed by an individual, but by agents acting on behalf of...