“I know we told them we’d dock our ships,” whispered Kelly, a first year Sloan student, “but let’s just send a few of our ships to the coastal region, catch a few fish, and at least break even- no one will even know we violated the agreement.” I looked around the table to see my classmates – fellow sustainability certificate candidates – giddy at the prospect of such a profitable deception.
I never imagined a simple software simulation could teach me so much, so quickly, about both sustainability and human behaviour.
The Challenge of Overfishing
Fish stocks around the world are being threatened by overfishing.
Global demand for protein continues to skyrocket, and to satisfy this demand (and make a few bucks in the process) we are catching fish at rates that exceed the fish population’s ability to regenerate, thereby depleting fisheries.
According to the UN Food and Agriculture Organization’s (FAO) 2010 report on the state of world fisheries, over 50% are already fully exploited, and another 32% are in severe condition – either depleted, recovering from depletion, or overexploited.
Solving this problem is not as simple as cutting back on sushi.
The World Wildlife Fund explains that overfishing is caused by a number of factors, such as unsustainable fishery management and poor practices, inefficient subsidies and regulatory schemes, significant bycatch of young fish, and unfair cross-border agreements.
The science around exactly how many fish remain is imprecise, and there are many views on how best to curb overfishing – from stronger regulations to direct-to-consumer business models to increased consumer awareness and NGO involvement. Yet it’s clear that if we fail to improve the management of our fisheries, we will be remembered as the last generation that actually hunted for their food.
Fishbanks: An Overfishing Simulation
The Sustainability Initiative at MIT Sloan is doing their part to train the next generation of business leaders to combat overfishing. Fishbanks, developed at MIT, is an interactive tool that creates a virtual world in which students explore sustainable management of renewable resources.
It was during my own experience with Fishbanks that I faced the challenge of confronting my fellow student, Kelly, and arguing that our fishing operation should forego our profits, honour our verbal commitment to the other operations in our ocean, and risk the chance that they instead might deceive us and deplete our shared resource.
The Fishbanks simulation started when we were asked to take out a dollar and place it in the middle of a large conference room table. The pile of cash quickly grew to around $80. That’s a lot of beer in grad student speak.
We were then given our objective: maximise the net worth of your fishing operation. We were placed in teams and told that when the game ends, the company with the highest net worth would get the pile of money. In each “year” of the simulation, you and your team must collaboratively decide where to allocate your boats, and whether to buy or sell boats (and for how much), all in hopes of outwitting the other fishing operations in your ocean.
As soon as the professors explained the rules, showed us the software, and kicked off the first year, the chaos began. For the first few years, the catch was really high. People wanted to buy more boats to be able to catch more fish, and, as a result, the market price of boats skyrocketed. The companies with the most boats looked to have significant net worth, along with the ability to catch more fish each year.
After a few of these virtual years, everyone was pretty excited, and the competitive juices were flowing.
If We Can’t Collaborate in an Overfishing Simulation, What Are Our Odds in the Real World?
After a few more years of the simulation, it was clear that there were fewer fish. But, everyone had lots of really expensive boats that if left unused, were costing money and not bringing in any value.
The market price of boats was rapidly falling. We felt significant pressure to send our boats out to fish so we could recover our costs (let alone make any profits), even though we knew the fish populations were struggling.
Right around this time, our professor announced that as the fish populations were in trouble, the government would be forced to come in and enforce limits, or quotas, unless the fishing companies could voluntarily regulate themselves. It was at this time that we started talking to other fishing companies about ways to collaborate to save the fishery – or at least not deplete it.
Just like in the real world, measuring the regeneration rate of fish populations is really difficult, and the science is opaque. And, also like in real life, if you dock your boat, but your neighbour doesn’t, you get stuck with the costs, and he makes a quick buck.
It might have been a virtual simulation but we certainly felt the pain and indecision that many real fishing companies face.
“Winning” the Overfishing Simulation
It was right then that Kelly suggested we deceive our fellow fishermen.
We had all agreed to leave our boats in the harbour, despite the costs, and wait for the population to regenerate. Each team committed to eat their costs for the greater good of the fisheries.
But again, just as in real life, not everyone had the same costs. Our team had set an aggressive strategy and acquired lots of boats early on, so the cost of leaving our boats docked was much higher than for operations with only a few boats. And, since no one could fish, the price of the boats plummeted, leaving our net worth near zero and rapidly approaching a negative number.
We ultimately decided not to deceive our neighbours. Unfortunately, they deceived us and did go out to fish.
They barely broke even that round, but when the rest of us found out what they did, we gave them some pretty significant public shaming in the form of finger pointing and chanting, “cheaters, cheaters”.
When the simulation finally ended, almost all of the companies had a negative net worth. A few remained barely in the green.
The fish stocks were a different matter – we had almost completely depleted all the oceans.
Fishbanks and the Tragedy of the Commons
This dynamic that Fishbanks so clearly simulates is called the tragedy of the commons.
Coined by Garrett Hardin in a 1968 edition of Science, the theory explains that people will act in their own self-interest and deplete a shared resource, rather than work with others for the common good.
That’s exactly what we had done.
At the end of the simulation, the professors led a debrief discussion on how to actually “win” Fishbanks, and how these strategies can be used in the real world to achieve sustainability.
The dynamics of the system became clear once we saw a simple slide showing that the catch – what you can observe – continues to increase despite the rapid decline in the fish population because everyone is buying more boats and fishing more intensively. By the time you start to experience the decline in population through lower total catches, the fish population is nearly depleted and you’re left with significant dead assets.
So how do you overcome the tragedy of the commons?
Elinor Ostrom, the winner of a Nobel Memorial Prize in Economic Sciences in 2009, outlines the solution in her book Governing the Commons, in which she lays out a number of principles that must be followed. For example, you need rules that are appropriate for the context, modifiable by the participants, and respected by outside authorities. You also need to have penalties for those who violate the rules, and create mechanisms to resolve disputes among participants.
Teams that are successful in Fishbanks manage to enact these principles.
For example, teams may make an educated guess about the fish population’s regeneration rate, and use this to help set limits. They might gather and post data from each team, each round, for all to see. And they might agree to limit the number of purchased boats from the beginning, rather than try to negotiate harbouring the boats once it has already become expensive.
The Fishbanks debrief led naturally into a discussion of planetary boundaries and the fundamental truth that sustainability is based on not depleting our stocks of natural resources faster than they regenerate. In some ways, this was a sobering thought given the competitive and environmentally catastrophic experience we’d all just had.
But the exercise finishes with a question that gave me hope: how can we, as the next generation of leaders in business, mobilise people to create a sustainable future? Answering this is important for all of us – our fisheries depend on it.
Interested in playing or facilitating a Fishbanks session with your friends or colleagues? You can learn more and download the simulation at MIT’s LearningEdge platform.