Game theory - a study on the fishing industry around lake Victoria

Abstract

This contemporary concern study uses game theory to understand the problematic situation in the Lake Victoria basin linked to the fishing industry. Key players are identified as the governments in the three riparian states, the fisheries, and the fishermen. The issues studied are the overexploitation of the fish stock and the widespread use of destructive fishing practices. Games involving coordination failures and incentive constraints are primarily studied. A model of the fish stock over time as a function of fishing effort level is developed. This model is used to study the nature and game played by the fisheries. It is argued that a fishery will find it rational to increase effort level to unsustainable levels, if the discount rate is high enough, or if there are too many fisheries operating. Destructive fishing practices are investigated and thought partly linked to the game played by risk-aversive poor fishermen, to whom under certain conditions a certain lower income today is better than a higher income tomorrow. Policies addressing the overexploitation and destructive fishing practices are discussed. The use of production quotas is adviced to attempt to solve the problem of overexploitation of fish stock. It is noted that this requires the cooperation the three riparian states. Addressing the destructive fishing practices is thought best through monitoring and microcredit programs.