Individual quotas and revenue risk of fishing portfolio in the trawl fishery

•Trawlers are profit-oriented, and increasing fishing revenue is a more important business objective than minimizing revenue risk.•The seasonal migration of North-east Arctic cod determines the dynamics of the trawl fishery in generating profit.•Vertical integration of the Norwegian codfish trawl industry and the spatial and temporal flexibility to allocate fishing effort make trawlers less vulnerable to revenue fluctuations.•Minimizing revenue risk leads to inefficient allocation of fishing effort and quota portfolio in the Norwegian trawl fleet.•Since vessel and industry characteristics could sustain trawlers from revenue fluctuations, the implementation of enforcement rules such as season closure or area closure for conservation purposes might not severely affect trawler revenue. The Norwegian bottom-trawl fleet is managed through individual vessel quotas and is generally engaged in codfish fisheries, where several species contribute to the revenue of the fishery. The revenue from the fishing exhibits substantial intra-annual variation and carries a significant degree of risk due to the presence of intrinsic volatilities in the marine environment, such as seasonal fluctuations in stock size and constant changes in market conditions over the course of a year. In the face of volatile revenue, fishers may allocate fishing effort and use a quota portfolio to minimize revenue risk. However, decisions underlying effort allocation, such as when to fish what and how much to harvest to match the catch size and remaining quota, are challenging. In this regard, a decision-making framework based on a bio-economic model is used to explore the revenue risk minimization behavior of the Norwegian codfish trawl fleet targeting three different species (cod, saithe, and haddock), given the constraints set by the quotas. The study comprises trawl catches and fishing effort as well as the prices for the frozen products of codfish to investigate the adopted harvest strategy under two different scenarios. The results indicate that a risk-minimizing strategy leads to inefficient allocation of fishing quotas and fishing effort and that potential economic losses from minimizing revenue risk outweigh the benefits. Moreover, our findings prove that enhancing revenue is more important than minimizing revenue risk for the trawlers. We argue that the spatial and temporal freedom of the trawl vessels, together with a vertically integrated trawl industry, may explain the prioritization