Commercial fishing is characterized by three key economic and technological features that are relevant to the formulation of an economic theory of fish production. 1. A fishery resource, although conceivably exhaustible, is replenishable; that is, it is subject to laws of natural growth which define an environmental biotechnological constraint on the activities of the fishing industry. 2. The resource and the activity of production from it form a stock-flow relationship. The new growth in the population fish mass depends upon the harvest rate relative to natural recruitment to the stock. If the harvest rate exceeds the recruitment rate, the stock declines, and vice versa. 3. The recovery or harvesting process is subject to various possible external effects ail of which represent external diseconomies to the firm: (a) Resource stock externalities result if the cost of a fishing vessel's catch decreases as the population of fish increases. (b) Mesh externalities result if the mesh size (or other kinds of gear selectivity variables) affects not only the private costs and revenues of the fisherman but also the growth behavior of the fish population. (c) Crowding externalities occur if the fish population is sufficiently concentrated to cause vessel congestion over the fishing grounds and, thus, increased vessel operating costs for any given catch. All of these various types of externalities arise fundamentally because of the "common property," unappropriated (Gordon, 1954; Scott, 1955) character of most fishery resources, especially ocean and large lake fisheries.
Smith, Vernon L. “On Models of Commercial Fishing.” Journal of Political Economy, 77.2 (1969): 181-198.
University of Chicago