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More on rarity value

Posted by pbio on 07 May 2009 at 22:27 GMT

Author: Reinoud Joosten
Position: Dr./Assistant professor
Institution: University of Twente
Submitted Date: November 25, 2008
Published Date: December 11, 2008
This comment was originally posted as a “Reader Response” on the publication date indicated above. All Reader Responses are now available as comments.

Courchamp et al. [2006] introduce rarity value in a common-pool resource system in which unit profits of agents in an economic system dependent on this resource, increase to very high levels as the availability of the species goes to zero. There is a dangerous side to such a system as the propensity to exploit the resource increases as its scarcity increases which increases the propensity to exploit and so on. An important role is attributed to Allee effects, i.e., once the population size or density of the resource falls below a so-called Allee threshold, only negative growth rates are possible.
Joosten [2008] examines the issue a little bit closer in modified versions of a small Fish War (Joosten [2007] incorporating rarity value and an Anthropogenic Allee Effect (AAE). In a small Fish War a number of agents interact on a body of water and essentially have two options: to fish with or without restraint. Fishing without restraint always gives a higher immediate payoff than the alternative at any point in time. Fishing with restraint is assumed to be sustainable in the long run, however fishing without restraint may very well damage the fish stock and induce lower catches later on. The analysis considers the combined effects of (decreasing) quantities and (increasing) unit profits evaluated in the long run on equilibrium behavior. The gloomy scenario described by Courchamp et al. [2006] is not the only possible scenario. Surprisingly, under some conditions, self-interest and sustainability under rarity value provide no tensions assuming that the fishermen are very patient, i.e., they are sufficiently interested in high long-term average total profits. However, if rewards associated with maximum scarcity are sufficiently high, the economic system and the resource system have conflicting interests, so to speak. Highest sustainable equilibrium rewards can only be accomplished by reaching the lowest possible sustainable fish stock on purpose. The (biological part of the) resource system becomes very vulnerable in the latter case.
In Joosten [2008] it is explained how the agents achieve the necessary scarcity levels to exploit rarity value. Courchamp et al. [2006] just assume that they can, evading the issue how the agents get there. Dominance relations among the choices reverse once unit profits become negative. With the latter we mean that fishing without restraint is the dominant action in games with positive unit profits, whereas it becomes dominated by the alternative for negative unit profits. Hence in the latter case, sufficiently myopic agents choose restraint, the dominant action in the stage game. In these respects, Joosten [2008] add some novel aspects and new insights to the frameworks of Joosten [2007] as well as Courchamp et al. [2006].

Joosten R, 2007, Small Fish Wars: A new class of dynamic fishery-management games, ICFAI J Managerial Economics 5, 17-30.
Joosten R, 2008, Patience, Fish Wars, rarity value and Allee effects, Papers on Economics and Evolution #0724, Max Planck Institute on Economics.

No competing interests declared.