How Do Markets Manage Water Resources? An Experiment On Resource Market (De) Centralization With Endogenous Quality
AbstractWe test how a monopoly, a duopoly and a public monopoly manage and allocate water resources. Stock depletion for the public monopoly is fastest. However, it reaches the optimal stock level towards the end of the experimental sessions. The private monopoly and duopoly maintain inefficiently high levels of stock throughout the sessions. The average quality to price ratio offered by the public monopoly is substantially higher than that offered by the private monopoly or duopoly. A clear result from the experiments is that a public monopoly offers the highest (average) quality to price ratio and has the fastest rate of stock depletion compared to a private monopoly or duopoly.
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Bibliographic InfoPaper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we062207.
Date of creation: Apr 2006
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-29 (All new papers)
- NEP-COM-2006-04-29 (Industrial Competition)
- NEP-EXP-2006-04-29 (Experimental Economics)
- NEP-MIC-2006-04-29 (Microeconomics)
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