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Sharing the costs of cleaning a river: the Upstream Responsibility rule

Author

Listed:
  • Jorge Alcalde-Unzu

    (Public University of Navarre, Department of Economics.)

  • Maria Gomez-Rua

    (University of Vigo, Department of Statistics and Operations Research.)

  • Elena Molis

    (Department of Economic Theory and Economic History, University of Granada.)

Abstract

The cleaning up of waste present in transboundary rivers, which re- quires the cooperation of di erent authorities, is a problematic issue, espe- cially when responsibility for the discharge of the waste is not well-de ned. Following Ni and Wang [12] we assume that a river is a segment divided into several regions from upstream to downstream. We show that when the transfer rate of the waste is unknown, the clean-up cost vector provides useful information for estimating some limits in regard to the responsi- bility of each region. We propose a cost allocation rule, the Upstream Responsibility rule, which takes into account these limits in distributing costs \fairly" and we provide an axiomatic characterization of this rule via certain properties based on basic ideas concerning the responsibility of regions.

Suggested Citation

  • Jorge Alcalde-Unzu & Maria Gomez-Rua & Elena Molis, 2013. "Sharing the costs of cleaning a river: the Upstream Responsibility rule," ThE Papers 13/03, Department of Economic Theory and Economic History of the University of Granada..
    • Handle: RePEc:gra:wpaper:13/03
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Cost allocation; waste river; responsibility; characterization;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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