Introduction, 324. — I. The Ellsberg problem, 326. — II. Probabilistic interpretation, 326. — III. Utility interpretation, 327. — IV. Measuring nonmonetary utility, 328.

This paper extends the fundamental theorem of share (or capital) valuation under conditions of certainty and purely competitive markets, to allow for the distinction between capital gains and income in the taxation of personal income. The objective is to develop the theorem for the tax case in a form general enough to allow for corporations both currently and not currently paying a dividend. However, the general derivation is sufficiently tedious to warrant a presentation which begins with less general cases. Accordingly, we will first develop the share valuation equation for a continuous discount version of the taxless case for corporations either paying or not paying a dividend. Then we turn to the effect of income and capital gains taxes for corporations currently paying a dividend; and finally the more general case. The derivations will be simplified by assuming a constant rate of interest over time, but all the theorems can be extended to deal with foreseen changes in interest over time.

Commercial fishing is characterized by three key economic and technological features that are relevant to the formulation of an economic theory of fish production. 1. A fishery resource, although conceivably exhaustible, is replenishable; that is, it is subject to laws of natural growth which define an environmental biotechnological constraint on the activities of the fishing industry. 2. The resource and the activity of production from it form a stock-flow relationship. The new growth in the population fish mass depends upon the harvest rate relative to natural recruitment to the stock. If the harvest rate exceeds the recruitment rate, the stock declines, and vice versa. 3. The recovery or harvesting process is subject to various possible external effects ail of which represent external diseconomies to the firm: (a) Resource stock externalities result if the cost of a fishing vessel's catch decreases as the population of fish increases. (b) Mesh externalities result if the mesh size (or other kinds of gear selectivity variables) affects not only the private costs and revenues of the fisherman but also the growth behavior of the fish population. (c) Crowding externalities occur if the fish population is sufficiently concentrated to cause vessel congestion over the fishing grounds and, thus, increased vessel operating costs for any given catch. All of these various types of externalities arise fundamentally because of the "common property," unappropriated (Gordon, 1954; Scott, 1955) character of most fishery resources, especially ocean and large lake fisheries.