sloping demand and diminishing returns to increases in quality inputs eventually exhaust excess
rents, however, and entry stops when the headboat trip price (the equilibrium price per angler-
day) equals the average total cost per angler-day.28 Note that there is no inherent mechanism in
this rent dissipation process to ensure vessels will be fully employed at the long-run competitive
equilibrium; indeed, it is likely that capital will lie idle for some portion of the season. The
lower the barriers to entry (i.e. the lower are unavoidable fixed costs) the greater the tendency of
vessels to enter the fishery at a given market price and thus the greater the amount of “idle
capacity” within the system at equilibrium.
In summary, relative to optimal management, unfettered competition under open access
will lead to excessive demand for fishing days. Vessel owners will place too few passengers
onboard each trip and the number of vessels will exceed the optimal level and almost assuredly
engage in too few trips per season. These vessels will be equipped with excessive catch
augmenting capital given their number of passengers so that the harvest effectiveness of
individual anglers is too high. Distortionary spillovers from catch-augmenting inputs to non-
catch quality inputs are likely although the nature of this interaction is ultimately an empirical
matter. The proportion of catch that is landed will be too high (except where discards face full
mortality) while the amount of landed catch will be further augmented by the distortions in the
effectiveness of angler effort. The overall consequences of these distortions are a reduced
equilibrium biomass level, lowered rents for vessel owners and reduced total social surplus
compared to the optimally managed case.
Interestingly, some of the foregone rents under competition are accounted for via
transfers from vessel owners to anglers. Anglers do receive a greater number of days at sea and
higher catch effectiveness (although not necessarily catch) in competitive bioeconomic
28 We are, of course, assuming away any problems associated with the integer nature of the number of vessels.
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