Small-scale fisheries are ubiquitous and critically important around the world, but they are under serious threat from climatic changes and variability. Climate-driven redistribution of maximum fisheries catch potential is expected to be most severe across tropical regions where small-scale fisheries are widely governed through relationships between fishery users, i.e. fishers and traders. These informal cooperative and competitive relationships provide access, support, and incentives for fishing and affect benefit distribution in fisheries. Yet, their formal management is often informed by economic analyses that focus primarily on the actions of and impacts on individuals. We argue this leads to a disconnect between reality and its model representation, which may reduce the efficiency and efficacy of formal fisheries management and potentially trigger adverse consequences. Here, we examine this argument by comparing the predictions of a simple bioeconomic fishery model with those of a social-ecological model that incorporates the dynamics of cooperative and competitive trade relations in an illustrative, empirical showcase in the Mexican Humboldt squid fishery.We find that (1) the social-ecological model substantially improves accuracy in predicting observed fishery variables compared to the simple bioeconomic model, (2) climate-driven changes in cooperative trade relationships affect fishers’ income and income inequality, and (3)  the current fishery development program, that is supported by the predictions of the simple bioeconomic model, may increase income inequality between fishers and traders. Our findings highlight the real and urgent need to re-think the current analytical boundaries of models in the context of small-scale fisheries and climate change worldwide to encompass social relationship dynamics.