Strategic dynamic interaction: Fish wars

Abstract The motivation for this paper is fishing legislation that divides a fishery into regions, each of which is exploited by a single firm. As the regions have common borders, an analysis based on models with one firm and one region would lead to erroneous results. An alternative motivation is the problem of a fishery with several interacting species, each exploited by a single firm. In this paper we assume that fish move between regions. Therefore, the stock in one region depends not only on previous stock and catch in the region, but also on the stock and catch in neighboring regions. In the multiple species interpretation, these movements correspond to the interactions between species. We use a multisectoral differential duopoly model in order to capture the strategic interactions of the firms over time. The model is solved for an example in which varying levels of dependence between regions can be compared.