Sharing a polluted river network
AbstractA polluted river network is populated with agents (e.g., firms, villages, municipalities, or countries) located upstream and downstream. This river network must be cleaned, the costs of which must be shared among the agents. We model this problem as a cost sharing problem on a tree network. Based on the two theories in international disputes, namely the Absolute Territorial Sovereignty (ATS) and the Unlimitted Territorial Integrity (UTI), we propose three different cost sharing methods for the problem. They are the Local Responsibility Sharing (LRS), the Upstream Equal Sharing (UES), and the Downstream Equal Sharing (DES), respectively. The LRS and the UES generalize Ni and Wang ("Sharing a polluted river", Games Econ. Behav., 60 (2007), 176-186) but the DES is new. The DES is based on a new interpretation of the UTI. We provide axiomatic characterizations for the three methods. We also show that they coincide with the Shapley values of the three different games that can be defined for the problem. Moreover, we show that they are in the cores of the three games, respectively. Our methods can shed light on pollution abatement of a river network with multiple sovereignties.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 38839.
Date of creation: 01 Apr 2012
Date of revision:
River network; Water pollution; Cost sharing; the Shapley value;
Other versions of this item:
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-22 (All new papers)
- NEP-ENV-2012-05-22 (Environmental Economics)
- NEP-GTH-2012-05-22 (Game Theory)
- NEP-NET-2012-05-22 (Network Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- S.C. Littlechild & G.F. Thompson, 1977. "Aircraft Landing Fees: A Game Theory Approach," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 186-204, Spring.
- Wang, Yuntong, 2011. "Trading water along a river," Mathematical Social Sciences, Elsevier, vol. 61(2), pages 124-130, March.
- Ambec, S. & Ehlers, L., 2007. "Cooperation and equity in the river sharing problem," Working Papers 200705, Grenoble Applied Economics Laboratory (GAEL).
- Carmen Marchiori, 2010. "Concern for Fairness and Incentives in Water Negotiations," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 45(4), pages 553-571, April.
- van den Brink, Rene & Gilles, Robert P., 1996. "Axiomatizations of the Conjunctive Permission Value for Games with Permission Structures," Games and Economic Behavior, Elsevier, vol. 12(1), pages 113-126, January.
- Aadland, David & Kolpin, Van, 1998. "Shared irrigation costs: An empirical and axiomatic analysis," Mathematical Social Sciences, Elsevier, vol. 35(2), pages 203-218, March.
- Hung, Ming-Feng & Shaw, Daigee, 2005. "A trading-ratio system for trading water pollution discharge permits," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 83-102, January.
- Weber, Marian L., 2001. "Markets for Water Rights under Environmental Constraints," Journal of Environmental Economics and Management, Elsevier, vol. 42(1), pages 53-64, July.
- 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.
- Erik Ansink & Arjan Ruijs, 2007.
"Climate Change and the Stability of Water Allocation Agreements,"
2007.16, Fondazione Eni Enrico Mattei.
- Erik Ansink & Arjan Ruijs, 2008. "Climate Change and the Stability of Water Allocation Agreements," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 41(2), pages 249-266, October.
- S. C. Littlechild & G. Owen, 1973. "A Simple Expression for the Shapley Value in a Special Case," Management Science, INFORMS, vol. 20(3), pages 370-372, November.
- Brink J.R. van den & Talman A.J.J. & Herings P.J.J. & Laan G. van der, 2013.
"The average tree permission value for games with a permission tree,"
001, Maastricht University, Graduate School of Business and Economics (GSBE).
- Rene van den Brink & Jean-Jacques Herings & Gerard van der Laan & Dolf Talman, 2012. "The Average Tree Permission Value for Games with a Permission Tree," Tinbergen Institute Discussion Papers 13-023/II, Tinbergen Institute.
- Brink, R. van den & Herings, P.J.J. & Laan, G. van der & Talman, A.J.J., 2013. "The Average Tree Permission Value for Games with a Permission Tree," Discussion Paper 2013-001, Tilburg University, Center for Economic Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.