RT Journal Article
SR Electronic
T1 Adjustment Cost and Supply Response in a Fishery: A Dynamic Revenue Function
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 201
OP 215
DO 10.3368/le.85.1.201
VO 85
IS 1
A1 Asche, Frank
YR 2009
UL http://le.uwpress.org/content/85/1/201.abstract
AB In industries where firms can adjust product mix in response to price changes, the process can be delayed by adjustment costs. An example is fishermen who change fishing grounds to target different species. If adjustment costs are sufficiently large, this may hamper the fishermen’s response so that regulatory tools that are not efficient in the long run are useful in the short run. Moreover, adjustment costs can influence the choice of species targeted. In this paper dynamic supply equations are specified using a revenue function approach. Different hypotheses about the dynamics of the supply equations are tested for Norwegian trawlers. (JEL Q22, D21)