Fisheries Management in Congested Waters: A Game-Theoretic Assessment of the East China Sea

Abstract

Fisheries in the East China Sea (ECS) face multiple concerning trends. Aside from depleted stocks caused by overfishing, illegal encroachments by fishermen from one nation into another's legal waters are a common occurrence. This behavior presumably could be stopped via strong monitoring, controls, and surveillance (MCS), but MCS is routinely rated below standards for nations bordering the ECS. This paper generalizes the ECS to a model of a congested maritime environment, defined as an environment where multiple nations can fish in the same waters with equivalent operating costs, and uses game-theoretic analysis to explain why the observed behavior persists in the ECS. The paper finds that nations in congested environments are incentivized to issue excessive quotas, which in turn tacitly encourages illegal fishing and extracts illegal rent from another's legal waters. This behavior couldn't persist in the face of strong MCS measures, and states are thus likewise incentivized to use poor MCS. A bargaining problem is analyzed to complement the noncooperative game, and a key finding is the nation with lower nonoperating costs has great leverage during the bargain.