PLAYING CHICKEN WITH SALMON
Jon Olaf Olaussen
Wild Atlantic salmon are traditionally harvested from both the sea
and spawning rivers during spawning runs. From an economic point of view,
the return from sport fishing in rivers is several times higher than
marine ‘for meat only’ harvests. This situation calls for
a side payment regime where river owners pay marine fishermen not to
fish, and where both parties gain. This paper argues that the reason
why such side payment regimes are rarely seen, despite the obvious mutual
gain, is due to the potential free-riding incentives among river owners.
Although it is shown that the decision each river owner faces can be
described as a game of chicken, taking the stochastic ecology into account
may reveal a different pay-off structure. It is also demonstrated that
the stochastic ecology of salmon, combined with price rigidities in the
rivers, may explain the lack of side payment regimes.