33


The economically "correct" degree of utilization of effort in the

fishery is shown to correspond to some form of maximum economic yield

(dynamic MEY or static MEY). Further, the failure to achieve MEY under

perfect competition was universally attributed to the common property

nature of the resource and externalities in production.

 While the preceding analysis may seem to indicate that the "book

has been closed" on bioeconomic theory, the converse is true. As with

most theoretical constructs, when the assumptions change, so do the

conclusions. Thus, Anderson (1973) has shown that when price becomes

variable, the elasticity of demand becomes an important determinant in

defining the socially efficient production level for a fishery.

Furthermore, Bromley (1969) has eloquently questioned whether or not

externalities do, in fact, exist in fisheries production. By differ-

entiating between productive interdependence and externalities, Bromley

argues that perfect competition may not be as inefficient as the tradi-

tional writers above would lead one to believe. He also questioned the

social optimality of maximizing returns to the resource, suggesting that

maximizing net social benefits is perhaps more appropriate.

 Theoretical Extensions


 The foregoing has provided a review of the basic notions and

 principles underlying the bioeconomic models used in analyzing fisheries

 production. As suggested by the term bioeconomics, the models are char-

 acterized by incorporating prices and costs into the biological surplus

 stock production models. The resulting analysis then proceeded in the

 neo-classical economic tradition to derive the results of the undesira-

 bility of unregulated competition, the economic inefficiency of MSY