The optimal allocation of water along a system of rivers: a continuous model with sequential bidding
AbstractThis paper uses a control theory approach to analyse the collectively optimal rate of extraction along a river system and constructs a bidding mechanism that would produce the required prices at each point. It also analyses some characteristics of this mechanism. This approach brings some new perspective to existing work on externalities. It also helps bring to light some aspects of the system as a whole that may be less obvious in a more piecemeal analysis, including the fact that there may not be an optimal solution to the allocation problem. Although the bidding mechanism may be difficult to implement, it may be possible to design various forms of hybrid schemes that have practical value.
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Bibliographic InfoArticle provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural and Resource Economics.
Volume (Year): 50 (2006)
Issue (Month): 3 (September)
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More information through EDIRC
control theory; mechanism design; optimal allocation; rights markets; waters; Resource /Energy Economics and Policy;
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- Weber, Marian L., 2001. "Markets for Water Rights under Environmental Constraints," Journal of Environmental Economics and Management, Elsevier, vol. 42(1), pages 53-64, July.
- D. Kilgour & Ariel Dinar, 2001. "Flexible Water Sharing within an International River Basin," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 18(1), pages 43-60, January.
- Quiggin, John C., 2001. "Environmental economics and the Murray-Darling river system," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(1), March.
- Nadine Wittmann, 2014. "A Note on Distortional Distributional Effects in River Basin Discharge Permit Trade," Water Resources Management, Springer, vol. 28(1), pages 279-285, January.
- Erik Ansink & Hans-Peter Weikard, 2012.
"Sequential sharing rules for river sharing problems,"
Social Choice and Welfare,
Springer, vol. 38(2), pages 187-210, February.
- Erik Ansink & Hans-Peter Weikard, 2009. "Sequential Sharing Rules for River Sharing Problems," Working Papers 2009.114, Fondazione Eni Enrico Mattei.
- Nadine Wittmann, 2014. "A Microeconomic Perspective on Water Resources Management: Analyzing the Effects on Optimal Land Rents Along a River Basin," Water Resources Management, Springer, vol. 28(5), pages 1309-1325, March.
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