Overcoming principal-agent problems to improve cooperative governance of internationally shared fisheries.

Game Theory has been applied to fisheries for over 30 years. For internationally shared stocks, these applications have focused primarily on the need for cooperative management between fishing states to promote effective governance. Non-cooperation, however, has been the norm in shared stocks management, with the prisoner’s dilemma emerging time and again, resulting in over-capacity and overfishing. In this chapter, we describe the history of global fisheries as a prisoner’s dilemma, and review how cooperative Game Theory has been applied. We argue that the cooperative applications, however, are inadequate in fully elucidating how benefits from cooperation could be achieved, specifically by ignoring the problems of moral hazard and adverse selection. Both of these are related to information asymmetries and both challenge the governing authority and power of Regional Fisheries Management Organizations (RFMOs). Using the lens of principal–agent theory, we speculate on the potential for particular tools, such as catch shares, high seas closures, taxes and logbooks, to help strengthen RFMOs by overcoming these principal–agent problems. The case of tuna in the Western and Central Pacific Ocean (WCPO) is used to demonstrate the potential application of this approach.