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Equity Basis Selection in Allocation Environments: An Empirical Analysis

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  • Aadland, David
  • Koplin, Van

Abstract

Successful formation and long-term stability of cooperative ventures is often linked to the perceived fairness of the cost and resource allocations that these ventures employ. Indeed, the lack of a consensus over what basis should be used for gauging equitable allocation can undermine the prospects for collaboration. We use irrigation cost sharing as a context for examining the equity basis selections of cooperative ventures that successfully form and endure. Our analysis reveals that these selections are explained by features of the cooperative environment and inequities in the derived benefits from the irrigation water.

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Bibliographic Info

Article provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.

Volume (Year): 36 (2011)
Issue (Month): 2 (August)
Pages:

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Handle: RePEc:ags:jlaare:117146

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Web page: http://waeaonline.org/
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Related research

Keywords: irrigation; cost allocation; equity; probit model; Risk and Uncertainty;

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  1. M. Rabin, 2001. "Incorporating Fairness into Game Theory and Economics," Levine's Working Paper Archive 511, David K. Levine.
  2. Aadland, David & Kolpin, Van, 1998. "Shared irrigation costs: An empirical and axiomatic analysis," Mathematical Social Sciences, Elsevier, vol. 35(2), pages 203-218, March.
  3. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
  4. Ray P. Teele, 1900. "Water Rights in the Arid West," Journal of Political Economy, University of Chicago Press, vol. 8, pages 524.
  5. Dayton-Johnson, Jeff, 2000. "Choosing rules to govern the commons: a model with evidence from Mexico," Journal of Economic Behavior & Organization, Elsevier, vol. 42(1), pages 19-41, May.
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