Cooperative Formation and Peer Effects in Fisheries

The economic benefits that arise following the transition to a rights-based fishery management regime accrue on both the extensive and intensive margins. This research explores the changes in fleet composition, economic performance, and coordination that occurred following the introduction of the Bering Sea Crab Rationalization Program. On the extensive margin, we estimate the relative efficiency of vessels within each fishing cooperative to look for potential arbitrage opportunities when selecting which vessels will fish the cooperative's quota allocation. On the intensive margin, we investigate the role of peer effects in facilitating the flow of information within the cooperative. The results support two hypotheses within the red king and snow crab fisheries: (1) the cooperatives which formed appear to have exploited the intra-cooperative efficiency arbitrage opportunities, and (2) an increase in landings by a fellow cooperative member tends to increase one's own landings, a positive peer effect.