Toward a Bioeconomic Theory of Price-Based Regulation in Recreational Fisheries under Federalism

Abstract

Recreational fishing is a culturally, economically, and ecologically significant activity across the United States and represents a compelling case of environmental federalism. While conservation goals are often set at the federal level, individual states retain primary authority to regulate recreational fishing effort. This decentralized system offers flexibility but also generates coordination challenges when fish stocks and angler populations cross jurisdictional boundaries. One understudied aspect of managing effort in recreational fisheries is the role of price-based regulations, such as fishing license fees, in shaping angler behavior and system outcomes. This project introduces a structural bioeconomic model to examine how decentralized, price-based regulation affects recreational fisheries' participation, effort, and sustainability. We define a stylized management objective in which a state manager sets license prices for resident and non-resident anglers to maximize the sum of resident consumer surplus and total license revenue, subject to a harvest constraint. Using optimal control theory, we analyze static and dynamic price-setting behavior across various biological and economic conditions. In static models, we show that license prices can serve as effort controls and that price ratios between resident and non-resident anglers shift depending on scarcity and management priorities. In dynamic models, we find that if angler preferences do not respond to stock conditions, optimal pricing leads to extinction. However, when stock-dependent preferences are included, the system converges to a steady state with sustainable fish populations and controlled effort for likely parametrizations. Our results provide a theoretical foundation for understanding how price-based mechanisms influence dynamics and outcomes in other regulated common-pool resource systems, such as game management.