SHARING THE BENEFITS OF COOPERATION IN HIGH SEAS FISHERIES: A CHARACTERISTIC FUNCTION GAME APPROACH

In the current paper we examine a game-theoretic setting in which three countries have established a regional organization for the conservation and management of straddling and highly migratory fish stocks. A characteristic function game approach is applied to describe the sharing of the surplus benefits from cooperation. We demonstrate that the nucleolus and the Shapley value give more of the benefits to the coalition with substantial bargaining power than does the Nash bargaining scheme. We also compare the results that are obtained by using the nucleolus and the Shapley value as solution concepts. The outcomes from these solution concepts depend on the relative efficiency of the most efficient coalition. Furthermore, the question of fair sharing of the benefits is considered in the context of straddling stocks.