| Summary: | The cost of reducing the labour force during a transition from an overexploited fishery to a bionomic fishery is taken into account. This affects both the long run steady state and the optimal approach to steady state. These effects are illustrated using the case of the Northeast‐Arctic cod stock as a stylized example. The method outlined represents an operational way to assess harvest quotas as well as effort quotas both in the steady state and not least on the path to steady state. In the steady state analysis completely general functional forms are used, whereas in the optimal path analysis the objective function is required to be quadratic in the control variable. This requirement, however, incorporates the most important sources of nonlinearities such as downward sloping demand and increasing marginal costs. Copyright Kluwer Academic Publishers 2000
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