REGULATION OF A PREY-PREDATOR FISHERY BY TAXATION: A DYNAMIC REACTION MODEL
Abstract
In a fully dynamic model of an open-access fishery, the level of fishery effort expands or contracts according as the net economic revenue (i.e., perceived rent) to the fisherman is positive or negative. A model reflecting this dynamic interaction between the perceived rent and the effort in a fishery, is called a dynamic reaction model. In this paper, we study a dynamic reaction model, in which the prey species is subjected to harvesting in the presence of a predator and a tax. It is also assumed that the gross rate of investment of capital in the fishery is proportional to the perceived rent. With this capital theoretic approach, the dynamical system consisting of the growth equations of the two species and also of the fishing effort is formulated. The steady state is determined and its stability is discussed. The object is to maximize the monetary social benefit as well as prevent the predator from extinction, keeping the ecological balance.