Chasing the Spillovers: Locating Protected Areas in a Trans-Boundary Fishery

Abstract

Marine protected areas (MPAs) can positively impact upon marine biodiversity and fisheries returns. Increased fish densities inside MPAs can positively affect catches outside these areas. We examine MPA placement in a transboundary fishery when nations are, and are not, cooperative. We apply a differential game using a bioeconomic model to analyze behavior in MPA placement and effects on effort and biomass in two nations if both nations implement an MPA. Absence of cooperation can result in a prisoners’ dilemma in MPA placement. Strategic interactions lead to a divergence between socially or ecologically optimal MPAs and those chosen by national governments. (JEL: Q22)