Reforming resource rent policy: an information economics perspective

Efficient management of natural resources requires that the least cost fishers operate in a fishery. Information economics tells us that firms have information about their costs that governments cannot readily acquire, and that we need to ensure this information is revealed in order to allocate access efficiently. Auctions can achieve this, and simultaneously collect resource rent to give industry ongoing efficiency motivation. This paper highlights the relevance of information economics in fishery management, and identifies some specific auction design issues relevant to allocating new aquaculture sites.