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Sharing a River among Satiable Countries

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  • AMBEC, Stefan
  • EHLERS, Lars

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 of a coalition cooperate, then there may not exist any distribution satisfying the UTI doctrine.

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Bibliographic Info

Paper provided by Centre interuniversitaire de recherche en économie quantitative, CIREQ in its series Cahiers de recherche with number 07-2006.

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Length: 30 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:mtl:montec:07-2006

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Keywords: Water Allocation; Externalities;

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  1. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October.
  2. 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.
  3. Gabrielle Demange, 2004. "On group stability in hierarchies and networks," Post-Print halshs-00581662, HAL.
  4. Geoffroy de Clippel & Roberto Serrano, 2008. "Marginal Contributions and Externalities in the Value," Econometrica, Econometric Society, vol. 76(6), pages 1413-1436, November.
  5. Moulin, Herve, 1990. "Uniform externalities : Two axioms for fair allocation," Journal of Public Economics, Elsevier, vol. 43(3), pages 305-326, December.
  6. MANIQUET, François, . "A characterization of the Shapley value in queueing problems," CORE Discussion Papers RP -1662, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. 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.
  8. Chander, P. & Tulkens, H., . "The core of an economy with multilateral environmental externalities," CORE Discussion Papers RP -1276, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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Cited by:
  1. d'ALBIS Hippolyte & AMBEC Stefan, 2009. "Fair intergenerational sharing of a natural resource," LERNA Working Papers 09.23.299, LERNA, University of Toulouse.

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