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The United States Congress recently passed a law that creates an alternative to individual transferable quota (ITQ) management. The American Fisheries Act promises the ability to rationalize one of the world's largest fisheries, the North Pacific pollock fishery, without the overt appearance of allocating permanent property rights to a public resource. The Act enabled pollock fishers to form cooperative bargaining units that are guaranteed a fixed share of the total allowable catch (TAC) providing they deliver to historic processors. This paper explores the evolution of that policy change and the innovative use of fishery cooperatives to advance voluntary decapitalization and rationalization that Congress intended to benefit both vessels and processors. Game theory offers insights into the likelihood of achieving congressional intent. It is argued that while the Act is Pareto improving, it may violate the legislative intent of win-win rationalization and may introduce a market failure while attempting to rid the fishery of the open-access externality. [ABSTRACT FROM AUTHOR]