Can the Threat of Economic Sanctions Ensure the Sustainability of International Fisheries? An Experiment of a Dynamic Non-cooperative CPR Game with Uncertain Tipping Point

Publication available at https://link.springer.com/article/10.1007/s10640-020-00419-y

Abstract

Complex dynamic systems such as common-pool resource systems can undergo a critical shift at a given threshold, the so-called tipping point, which potentially requires substantial changes from the management system. We present in this research a framed laboratory experiment design to examine how the threat of economic sanctions influences the strategic management of a common-pool resource. We use the context of the East Atlantic bluefin tuna international fishery as it has been the archetype of an overfished and mismanaged fishery until a dramatic reinforcement of its regulations followed the threat of a trade ban. We consider endogenous threats and examine their effects on cooperation through harvest decisions taken in the context of non-cooperative game theory in which cooperation could be sustained using a trigger strategy. Our experiment results show that the threat of economic sanctions fosters more cooperative behaviors, less over-exploitation, and a more precautionary management of resources, reducing the economic rent dissipation. This result is exacerbated when the location of the tipping point that triggers the economic sanction is uncertain. In order to avoid free-riding behaviors and foster the emergence of a self-enforcing agreement, we suggest to introduce economic sanctions, such as trade restrictions, associated with uncertain biological limit reference points.

Jules, S., Sylvain, B., Patrice, G. et al. Can the Threat of Economic Sanctions Ensure the Sustainability of International Fisheries? An Experiment of a Dynamic Non-cooperative CPR Game with Uncertain Tipping Point. Environ Resource Econ (2020). https://doi.org/10.1007/s10640-020-00419-y

Mr. Jules Selles, also made a presentation during 2018 Summer School at the University of Battambang. His presentation is available here