Natural resource use with limited-tenure property rights

We study the dynamic harvest incentives faced by a renewable resource harvester with insecure property rights. A resource “concession” is granted for a fixed duration, after which it is renewed (with a known probability) only if a target stock is achieved. Despite the insecurity of this property right, simple concessions contracts can be designed to induce first best harvest trajectories. We examine how those contracts will depend on economic, ecological, and institutional variables, and apply theoretical insights to two concessions-managed fisheries in Baja California, Mexico.