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The overarching objective of the FarFish project is to provide knowledge, tools and methods to support responsible, sustainable and profitable EU fisheries outside European waters, both within the jurisdiction of non-EU nations as well as international waters. In order to achieve this, the project places emphasis on stakeholder participation in a cocreational approach. Stakeholders in the FarFish case studies are however many and often with very different priorities, and sometimes contradictory agendas and objectives. Game theory is an approach that can be successful in studying exactly such cases. The FarFish project has therefore devoted a special task for applying game theory to produce theoretical optimal behaviours within the context of the case studies in the project. The results of this game theory task are presented in this report, which is in the format of a journal article. The plan is to submit this manuscript to a peer-reviewed journal shortly.

Bryr den norske befolkningen seg om dyphavet og de organismer som lever der selv om vi ikke har noen direkte nytte av dem? Er vi villig til å ofre økonomisk aktivitet som fiskeri og oljevirksomhet for beskytte miljøet i dyphavet? Vår studie sier ja.

Dette er en omarbeidet versjon av utredningen Økonomisk verdsetting av havmiljø – Anvendelse på havområdene i Lofoten-Vesterålen gjort på oppdrag for Miljøverndepartementet i 2007-2008. I sommer har konflikten om havområdene utenfor Lofoten-Vesterålen toppet seg, med sterke utspill fra fiskerhold om seismikkskyting på fiskefelt. Økende bruk av havet til ulike aktiviteter, det være seg fiske eller petroleumsvirksomhet, oppdrett, transport eller turisme, gjør at en bredere forståelse av hvilke verdier havet tilbyr er et viktig innspill i politiske avgjørelser. I dette arbeidet presenteres og kvantifiseres økonomiske verdier generert i territorialfarvannet utenfor Nordland fylke ved bruk av Total Economic Value (TEV) oppsettet. Studien viser at verdier vi vanligvis forbinder med havet, slik som fiske og turisme, kun utgjør en begrenset andel av de totale verdiene som havmiljøet tilbyr.

Models of sequential bargaining under asymmetric information often exhibit equilibria which are characterised by the fact that agreement is reached only with a delay and that the final (period) solution is ex ante inefficient. The latter means that agreement is not reached though it is efficient (aggregate pay off exceeds aggregate costs). In this paper we analyse how intervention by a third agent in a sequential bargaining process, modelled as a durable goods monopoly, affects the (high path) equilibrium outcome. The effects of intervention crucially depend on how intervention is formulated. When the intervening agent and the seller decides the price and the subsidy (the intervening agent’s contribution) is decided in a Stackelberg game with the intervening agent as the leader the negotiations are always speeded up and equilibrium inefficiency reduced. When the seller acts as a Stackelberg leader the negotiations are only conditionally speeded up and the equilibrium inefficiency only conditionally reduced. For the same values on the reservation prices and discount factor intervention is more likely to take place when the seller acts as a Stackelberg leader. Also, both the seller’s price and the subsidy are higher when the seller acts as a Stackelberg leader compared to if the intervening agent acts as a Stackelberg leader.

Imperfect markets, asymmetric information and transboundary pollution are all characteristics that in most cases lead to inefficient “market” outcomes, and which thus are arguments for (public) intervention in the market. On the other hand, these characteristics also imply strategic behaviour by the economic agents, and then the effects of public intervention may be different from the traditional results of e.g. subsidies. The point of departure for this paper is the trading of an environmental project in a market with the above mentioned characteristics and where the pollution is transboundary. The trade is promoted by (foreign) authorities in that they offer a grant is trade takes place. We show that the effects of the grant strongly depend on the interests of the authorities, and that the subsidisation does not necessarily make the trading outcome more efficient.