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Sharing a river among satiable countries

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  • Ambec, S.
  • Ehlers, L.

Abstract

With diminishing global water reserves the problem of water allocation becomes increasingly important. We consider the problem of efficiently sharing a river among a group of satiable countries. Inducing countries to efficiently cooperate requires monetary compensations via international agreements. We show that cooperation of the other countries exerts a positive externality on the benefit of a coalition. Our problem is to distribute the benefit of efficiently sharing the river under these constraints. If the countries outside of a coalition do not cooperate at all, then the downstream incremental distribution is the unique compromise between the absolute territorial sovereignty (ATS) doctrine and the unlimited territorial integrity (UTI) doctrine. If all countries outside a coalition cooperate, then there may not exist any distribution satisfying the UTI doctrine.

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File URL: http://www.grenoble.inra.fr/Docs/pub/A2006/gael2006-08.pdf
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Bibliographic Info

Paper provided by Grenoble Applied Economics Laboratory (GAEL) in its series Working Papers with number 200605.

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Date of creation: 2006
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Handle: RePEc:gbl:wpaper:200605

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Keywords: WATER ALLOCATION; EXTERNALITIES;

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  1. Geoffroy de Clippel & Roberto Serrano, 2008. "Marginal Contributions and Externalities in the Value," Econometrica, Econometric Society, vol. 76(6), pages 1413-1436, November.
  2. Henry Tulkens & Parkash Chander, 1997. "The Core of an Economy with Multilateral Environmental Externalities," International Journal of Game Theory, Springer, vol. 26(3), pages 379-401.
  3. 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.
  4. Carraro, Carlo & Siniscalco, Domenico, 1991. "Strategies for the International Protection of the Environment," CEPR Discussion Papers 568, C.E.P.R. Discussion Papers.
  5. Gabrielle Demange, 2004. "On group stability in hierarchies and networks," Post-Print halshs-00581662, HAL.
  6. Maniquet, F., 2000. "A Characterization of the Shapley Value in Queueing Problems," Papers 222, Notre-Dame de la Paix, Sciences Economiques et Sociales.
  7. Moulin, H., 1989. "Uniform Externalities: Two Axioms For Fair Allocation," UFAE and IAE Working Papers 117-89, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  8. Macho-Stadler, Ines & Perez-Castrillo, David & Wettstein, David, 2007. "Sharing the surplus: An extension of the Shapley value for environments with externalities," Journal of Economic Theory, Elsevier, vol. 135(1), pages 339-356, July.
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Cited by:
  1. d'Albis, Hippolyte & Ambec, Stefan, 2009. "Fair Intergenerational Sharing of a Natural Resource," TSE Working Papers 09-084, Toulouse School of Economics (TSE).

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