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A major challenge for the Pacific whiting industry is determining 

 how to optimally select a portfolio of product forms and improve 

 and standardize product characteristics in order to reduce risks 

 and maximize long run economic benefits. The industry must 

 carefully assess the benefits of improving product quality 

 characteristics and selecting the optimal combination of product 

 forms consistent with intrinsic and extrinsic variation in product 

 quality characteristics. Potential benefits of marginal 

 improvements for each product characteristic must be compared with 

 marginal costs in order to determine the optimal level of product 

 quality and product mix. However, to take advantage of these 

 production strategies, the industry must have some control or 

 assurance regarding some minimum level of supply. Without this 

 control, investment in product development and capital equipment 

 becomes too risky or too unprofitable. Public policies should be 

 designed to be consistent with this need; otherwise, regional and 

 national benefits may be significantly reduced (see Topic 5) . 



One final issue related to fisheries management and private sector 

 investment is that in order to control and improve product quality 

 characteristics, a significant degree of cooperation, risk sharing, 

 and marketing commitment is essential among industry sectors 

 (Sylvia and Peters 1991) . This is particularly true for Pacific 

 whiting since abuse of the product at any stage of the distribution 

 chain can significantly affect the quality of the product when it 

 is consumed. To address these issues the industry may need to 

 develop formal associations and generic quality standards, 

 especially in response to evolving product quality standards in 

 Europe and North America (Sylvia and Gaines 1992) . The transaction 

 and enforcement costs associated with developing these types of 

 organizations may be quite high. The scale and level of control 

 needed by industry to assure quality, therefore, may be 

 significant. Pacific whiting managers must recognize how their 

 alternative regulatory strategies will affect industry's decisions 

 to work cooperatively to control and promote product quality. In 

 particular some level of product supply must be assured over time 

 in order that the investments to develop such programs would have 

 meaningful long term payoffs. 



Topic 3: The potential economic costs and benefits of an Olympic 

 style "race for the resource" management regime for Pacific 

 whiting. 



There are few studies showing the potential costs and benefits of 

 an Olympic Style "race for the resource" type whiting fishery. The 

 following discussion, therefore, does not attempt to precisely 

 quantify costs and benefits of the Olympic style fishery, but 

 rather discusses those issues which characterize this management 

 strategy. 



