Rent Dissipation in Chartered Recreational Fishing: Inside the Black Box

Our findings to this point, while useful, raise important practical issues that are likely to
arise in real-world fisheries. In particular they raise questions about regulatory design when the
simplifying assumptions (complete certainty, homogeneity of anglers, absence of strategic
behavior, etc.) fail to hold. We address some of these practical concerns in the context of two
questions. First, who should bear the direct incidence of the landings and harvest taxes?
Second, could catch effectiveness or its inputs be targeted by regulators instead of harvest?

V.1 Who Pays the Landings and Discard Taxes?

The previous section did not consider who bears the direct cost of the landings and
discard taxes (or, equivalently, the extent of the market for discard and landings quotas). Indeed,
in a model of perfect competition, complete and symmetric information and zero monitoring
costs the direct incidence simply doesn’t matter for efficiency. However, as Coase made
abundantly clear, the assignment of rights in a world characterized by significant transactions
costs is often of the utmost importance.

In the case of the landings fee, it appears sensible for anglers to directly bear the burden
rather than vessels. First, a landings tax borne by for-hire vessel owners does not guarantee the
proper behavioral response from customers since landings are individually chosen (assuming of
course that they are not constrained by harvest). If monitoring and enforcement costs were
sufficiently small, vessels would directly pass on their landings charge to anglers according to
their individual landings, thus preserving the optimality of landings decisions. However, the
costs of doing so in practice may be significant and one might anticipate instead that vessel
owners would recoup their anticipated per-angler landings costs by an equivalent increase in the
price of a trip. While the combination of this increase with a discard tax would send the proper

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