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In this paper, I use a tractable predator-prey model with endogenous harvesting to assess the impact of a prey refuge on fishery performance. Using a two-stage game framework, where the prey-refuge consistently protects a portion of the environment from predators, this paper investigates: $(i)$ how fishers modify their behavior in the presence of a prey-refuge and $(ii)$ the conditions under which the prey-refuge enhances the social welfare. The results show that reducing the intensity of species interactions via the prey-refuge diminishes fishing pressure on both prey and predator populations. Interestingly, although full prey protection maximizes the payoff from prey harvesting, it does not necessarily minimize the predator's fishing payoff. Necessary and sufficient conditions for the existence of positive cooperative surplus are provided. Numerical examples reveal that the overall efficiency of the fishery, influenced by the prey-refuge, is highly contingent on fishers' willingness to wait for its benefits (i.e., the discount factor). Specifically, when fishers are sufficiently patient, the prey-refuge improves social welfare. Finally, prey refuge implementation can also occur when transfers are not allowed, or when fishers coordinate their fishing strategy. This paper contributes to the fishery management literature by proposing an alternative approach that can promote efficiency through indirect incentives.