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Unformatted text preview: Lessons learned from the fur seal treaty and role of the grim strategy. 1. It must create an aggregate gain so that all concerned countries potentially gain by abiding by the treaty. Proper management of fur seal stocks, especially ending pelagic sealing, would achieve this. 2. The aggregate gains must be distributed btw the players such that abiding by the treaty makes all players better off. Allocation of quotas and side payments to pelagic sealers - Canada and Japan, ensured this in the case of the fur seal treaty. 3. The treaty makers must ensure that a player loses by dropping out of the treaty. This was achieved by incorporating into the treaty if one of the four signatories dropped out all countries would do so. The harvest would then fall back to the Nash low output equilibrium. This is called the grim strategy. 4. Incentives must be in place to ensure that signatories abide by the rules of the treaty. They do not cheat. For this the signatories agreed to police the ocean and to impose penalties on sealers not in conformity with the treaty. Punishments were to be imposed by a sealers own country courts. 5. Entry by new players must be deterred. This was achieved by the four signatories banning imports of non-authenticated seal skins. As is happened, most seal skins were dyed in London because that was where the best dying processors were located. Thus, a seal skin could be authenticated as having been caught under the terms of the treaty if it had indeed passed through London. All that was necessary was for London to keep track of the source of uncured skins. History of the Fur Seal Treaty (1911) * In the early 18th century Russians begin hunting seal in the north pacific. And by the mid to late 1700's main breeding grounds discovered. * In 1799 Czar Paul granted a monopoly to Russian-American company. Limiting only landward surplus male seals to be taken, with economic rent to be paid to the Russian govt. no over exhaustive hunting occurred * In 1821 a Russian decree was said that no foreign ship could be within 100 miles of the breeding grounds. However GB and US denounce the decree. (no international recognition). * In 1867 the us purchased Alaska and uncontrolled sealing took place killing over 250,000 seals in one year. A one year temp ban of sealing took place after this. * 1870 americans took Russians solution to over harvesting through the granting the monopoly to Alaska commercial company. Annual 100,000 seals, only mature land bound males to be taken, no firearms, natives allowed to hunt, us govt to share in the rent, taxs, rents to us treasury. * This worked well til about 1890 * Pelagic sealing began to take effect. Very inefficient killing 4 seals to every one taken. And us began making arrests of Canadian Schooners who did these activities. GB sent warships to protect these Schooners. * 1892 tribunal of paris agreed with GB that Us property rights only ran as far as its territorial sea. Then no harvesting during may-june, no use of nets or explosives. Treaty of paris took effect in 1894. * Japan enters Pelagic sealing and us wants Japan to enter the treaty of paris, but GB refuses. * US then threatens to kill off whole heard, or to brand female seals. Both of these are non credible threats. * Russo-japanese war, japan won, japan now wants to protect its new heard and now sees the sense in an international treaty. 1906 * In 1910 the north pacific fur seal treaty was signed banning pelagic sealing. By 1917 the heard increased 3 fold to 2 million. ...
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This note was uploaded on 05/06/2008 for the course ECON 233 taught by Professor Hallwood during the Spring '08 term at UConn.
- Spring '08