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River Sharing and Water Trade

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  • Erik Ansink

    (Institute for Environmental Studies (IVM), VU University Amsterdam)

  • Michael Gengenbach

    (Department of Social Sciences, Wageningen University)

  • Hans-Peter Weikard

    (Department of Social Sciences, Wageningen University)

Abstract

We analyse river sharing games in which a set of agents located along a river shares the available water. Using coalition theory, we find that the potential benefits of water trade may not be sufficient to make all agents in the river cooperate and acknowledge property rights as a prerequisite for trade. Specifically, a complete market for river water may not emerge if there are four or more agents along the river. Instead, a partial market may emerge where a subset of agents trades river water, with the possibility that other agents take some of the river water that passes their territory.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2012.17.

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Date of creation: Mar 2012
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Handle: RePEc:fem:femwpa:2012.17

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Keywords: River Sharing; Water Trade; Market Emergence; Property Rights; Coalition Stability;

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  1. d'ASPREMONT, Claude & JACQUEMIN, Alexis & GABSZEWICZ, Jean J. & WEYMARK, John A., . "On the stability of collusive price leadership," CORE Discussion Papers RP -522, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Hans-Peter Weikard, 2009. "Cartel Stability Under An Optimal Sharing Rule," Manchester School, University of Manchester, vol. 77(5), pages 575-593, 09.
  3. CHANDER, Parkash & TULKENS, Henry, 1994. "A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution," CORE Discussion Papers 1994048, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. CHANDER, Parkash & TULKENS, Henry, 1995. "The Core of an Economy with Multilateral Environmental Externalities," CORE Discussion Papers 1995050, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Harold Houba & Hans-Peter Weikard, 2009. "Stone Age Equilibrium," Tinbergen Institute Discussion Papers 09-092/1, Tinbergen Institute.
  6. van den Brink, René & van der Laan, Gerard & Moes, Nigel, 2012. "Fair agreements for sharing international rivers with multiple springs and externalities," Journal of Environmental Economics and Management, Elsevier, vol. 63(3), pages 388-403.
  7. Wang, Yuntong, 2011. "Trading water along a river," Mathematical Social Sciences, Elsevier, vol. 61(2), pages 124-130, March.
  8. Ansink, Erik & Weikard, Hans-Peter, 2009. "Contested water rights," European Journal of Political Economy, Elsevier, vol. 25(2), pages 247-260, June.
  9. A. Muthoo, 2002. "A Model of the Origins of Basic Property Rights," Economics Discussion Papers 546, University of Essex, Department of Economics.
  10. 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.
  11. Michele Piccione & Ariel Rubinstein, 2007. "Equilibrium in the Jungle," Economic Journal, Royal Economic Society, vol. 117(522), pages 883-896, 07.
  12. Carraro, Carlo & Siniscalco, Domenico, 1991. "Strategies for the International Protection of the Environment," CEPR Discussion Papers 568, C.E.P.R. Discussion Papers.
  13. Bush, Winston C. & Mayer, Lawrence S., 1974. "Some implications of anarchy for the distribution of property," Journal of Economic Theory, Elsevier, vol. 8(4), pages 401-412, August.
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Cited by:
  1. Erik Ansink & Hans-Peter Weikard, 2013. "Composition Properties in the River Claims Problem," Tinbergen Institute Discussion Papers 13-199/VIII, Tinbergen Institute.

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