November 20, 2025
Better information about where to find fish can make extraction more efficient and lower costs. However, if everyone gets the same precise information, they might all rush to the same location at the same time. This creates congestion, which can cancel out or even outweigh the benefits of the better information.
ARE Alumnus '21 Gabe Englander and ARE Professor Larry Karp recently published a paper on this topic in The Review of Economic Studies with the late ARE Professor Leo Simon.
They model a fishery in which firms obtain both public and private signals about the location of the densest fish stock. They consider how the provision of information can lead producers to converge on the same location. Because public information increases congestion more than private information does, more precise private information has a different effect on overall welfare than more precise public information. They estimate their model parameters with high-resolution data from the world’s largest fishery, disentangling the role of public and private information in the presence of a negative congestion externality for a major global industry.