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Market Failure
Question
During the 1960s and 1970s in Perth, prawning with nets was a popular river pastime. However, the practice died out for many years due to overfishing. In 2012, scientists started a process of re-populating the river with Swan River prawns, with the idea being to allow people to begin recreational fishing for prawns again. This appears to have been a success, and people are soon again going to be allowed to go prawning in the river.
a) What is the market failure issue identified here?
b) How would you design a system to try to prevent the same problem of over-fishing occurring again?
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