On the other hand, if a social suboptimum 

 does not exist in an ocean fishery, the dis- 

 solution of oligopsonistic structure in the fish 

 processing industry would further misallocate 

 resources. Assume that effort had entered until 

 the effort level which would secure maximum 

 physical sustainable yield had been exceeded. 

 Breaking up the monopsony and allowing the 

 higher social marginal valuation to be revealed 

 would further overcapitalize the fishery and lead 

 to a lower physical sustainable yield. 



While the argument has not proven that 

 suboptimization in either fisheries or fish 

 processing industries will lead to a misallocation 

 of resources, the possibility of such an event 

 may lead to a desire to gather more information 

 about upstream-downstream linkages in these 

 industries before taking large irreversible policy 

 actions. It also may comfort those who wish for 

 maximum physical sustainable yield in the 

 fisheries and those who are hesitant about 

 breaking up what appears to be an oligopsonistic 

 fish distribution chain in the near future. 



An extension of the preceding analysis may 

 lead one to observe that imperfectly competitive 

 factor markets from one side allows the theoreti- 

 cal possibility that the unorganized fishermen 

 may be able to organize and bargain collectively 

 for higher prices without third-party effects. 

 Nevertheless, the tenor of this piece has sug- 

 gested that third-party effects may possibly be 

 involved and that the public interest may imply 

 that this bargaining should be observed by 

 representatives of the third parties, such as 

 the Government. 



Directly parallel to the problem of second 

 best in the economy is an ecological second best. 

 If two species are competitors in the ocean, an 

 increase in the sustainable yield of one may 

 reduce the sustainable yield of the other. Like- 

 wise, increasing the sustainable yield of a 

 species may increase the sustainable yield of 

 its predators and/or decrease the sustainable 

 yield of its prey. 



RISK, UNCERTAINTY, AND 

 INTERTEMPORAL CHOICE 



Anthony Scott (1962) has pointed out and 

 Plourde (1970) has recently given a concise 

 proof that looking for solution values on steady- 

 state curves (which these sustainable yield 



curves are) is akin to ignoring the existence of 

 a positive rate of time discount. This becomes 

 obvious when one assumes an infinite rate of 

 time discount and immediately finds the in- 

 stantaneous yield curve to be the only relevant 

 one for consideration. 



When one backs away from steady state 

 solutions, tries to pose the relevant horizon 

 curve, and tries to determine the role of time 

 discount, one realizes that he is postulating 

 expected values of a probability distribution of 

 possible yield curves with only a vague aware- 

 ness of the yields in short and long run which 

 will occur. It may be useful to separate problems 

 of uncertainty into two categories. On the one 

 hand, demand for particular fish species is 

 uncertain. It is one thing to extrapolate desires 

 for particular fish species into the near future. 

 It is quite something else to fail to realize that 

 current demand is dependent upon current 

 techniques of processing and marketing fish. 

 The rapid rise of consumption of frozen fish 

 steaks and fillets in recent years is only sug- 

 gestive of changes which we can expect in 

 the future. 



Major research programs, such as those 

 supported by the Sea Grant college system, are 

 currently attempting to reduce uncertainty 

 about fish supply. A number of important areas 

 need to be resolved. To manage the supply of 

 anchovy, one needs to know the biological 

 production function of anchovy. As already 

 suggested, ecological parameters are needed to 

 manage both independent fisheries and biologi- 

 cally interdependent species. Thus we need to 

 understand the nature of supply of all possible 

 species which might occupy an ecological niche. 

 It is interesting to examine the controversy 

 over total yield of food from the sea. As Chapman 

 has pointed out frequently in recent years, 

 the wide divergence in estimates really depends 

 upon the trophic level assumed. Consequently, 

 not only is there uncertainty about the supply 

 of any particular species of fish, but there is 

 uncertainty about the relevant definition of 

 supply offish. 



THE COST OF MOVING TO A PARTIAL 

 EQUILIBRIUM POINT 



Equilibrium points in static analysis are 

 illuminating for recommendations concerning 



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