We evaluate management implications of cross-species flexibility in a multiple-species individual fishing quota regulation. We derive fishermen’s privately optimal harvesting and discarding choices under a joint-in-inputs, costly-targeting technology and the complex mapping between quotas set by the regulator and harvest and discard outcomes. Flexibility can reduce fishery rent due to reduced control of harvest outcomes. Empirical evidence from the Gulf of Mexico commercial reef fish fishery is presented to test model predictions. We find no evidence that flexibility reduced discards caused by random quota overages. Discarding in the data is attributed to a particularly small quota and a much larger quota set for jointly harvested species.