A Game Theoretic Model and Solution for the Malindi Ungwana Bay Penaeid Conflict

Abstract

This is an empirical analysis of the Malindi Ungwana Bay prawn fishery in the coast of Kenya. A resource allocation problems is at the heart of the conflict between artisanal and commercial trawlers exploiting the prawn fishery in the bay. The Prawn Fishery Management plan by the government has not been fully implemented given its various shortcomings, leading to resource rent dissipation, stock externality, overfishing and a suboptimal fishery. Analysis of catch and CPUE data indicates the presence of important interactions between the fleets. Fisheries economics and game theory are applied here as the theoretical basis for solving this problem. Bioeconomic modelling is used to assess the status of resource utilization and profitability of the fishery. A two-player game theoretic model is then used to model the interaction between the fleets and to estimate an optimal resource allocation. This study confirms that the fishery is operating sub-optimally. In the author’s estimation, there are higher profits for cooperation than for non-cooperation among the fleets. These profits are obtained at comparatively lower levels of catch and effort and with better efficiency ratios in cooperation than in the non-cooperation scenario. Policy recommendations on optimal solutions to the conflict have been made. Management strategies for the maximization of resource rent and the sustainability of the fishery have also been suggested.