Think of two 8-year-olds drinking cold soft drinks. If they drink the soft drinks too quickly, they will have stomachaches and very cold throats. Compare two possible scenarios: The first scenario is that each 8-year-old has a cold soft drink in a glass with one straw. The alternative scenario is that there is one cold bottle and two straws in the bottle. The bottle holds twice as much, but the two 8-year-olds must share. What is likely to happen in each scenario? Which scenario has the better outcome?You probably concluded that, if each has their own glass, they will be more likely to drink at a measured pace (one hopes). They know there is a cost to drinking too quickly. If they are drinking from a common bottle, incentives exist to drink more quickly than they normally would. Obviously, if one does not, that 8-year-old may not get their fair share. Both may end up with stomachaches, but for different reasons.Suppose Atlantic salmon swim along the coast of Maine each year. The northeastern fishing fleet goes into the ocean at just the right time of year to catch and harvest the salmon. If the fleet catches 1,000 tons of salmon, there will be just enough left this fall to breed and replenish the salmon caught this year. However, if more than 1,000 tons are caught, the school will begin to diminish in size until it cannot sustain itself. Salmon will likely disappear from the Atlantic. Salmon are described as common goods or common resources.Question 13.35HomeworkUnansweredGiven these facts, what do you think is likely to happen to Atlantic salmon off the coast of Maine if there are no regulations on fishing?
Question
Think of two 8-year-olds drinking cold soft drinks. If they drink the soft drinks too quickly, they will have stomachaches and very cold throats. Compare two possible scenarios: The first scenario is that each 8-year-old has a cold soft drink in a glass with one straw. The alternative scenario is that there is one cold bottle and two straws in the bottle. The bottle holds twice as much, but the two 8-year-olds must share. What is likely to happen in each scenario? Which scenario has the better outcome?You probably concluded that, if each has their own glass, they will be more likely to drink at a measured pace (one hopes). They know there is a cost to drinking too quickly. If they are drinking from a common bottle, incentives exist to drink more quickly than they normally would. Obviously, if one does not, that 8-year-old may not get their fair share. Both may end up with stomachaches, but for different reasons.Suppose Atlantic salmon swim along the coast of Maine each year. The northeastern fishing fleet goes into the ocean at just the right time of year to catch and harvest the salmon. If the fleet catches 1,000 tons of salmon, there will be just enough left this fall to breed and replenish the salmon caught this year. However, if more than 1,000 tons are caught, the school will begin to diminish in size until it cannot sustain itself. Salmon will likely disappear from the Atlantic. Salmon are described as common goods or common resources.Question 13.35HomeworkUnansweredGiven these facts, what do you think is likely to happen to Atlantic salmon off the coast of Maine if there are no regulations on fishing?
Solution
If there are no regulations on fishing, it is likely that the Atlantic salmon off the coast of Maine will be overfished. This is because, similar to the scenario of the two 8-year-olds sharing a bottle of soft drink, the fishermen have an incentive to catch as many salmon as they can before others do. If each fishing vessel or fisherman tries to maximize their own catch without considering the overall population of the salmon, they may collectively catch more than 1,000 tons. This would lead to a decrease in the salmon population, as there wouldn't be enough salmon left to breed and replenish the population. Over time, this could lead to the extinction of Atlantic salmon in this area.
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