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Sharing a river among satiable agents

  • Ambec, Stefan
  • Ehlers, Lars

We consider the problem of efficiently sharing water from a river among a group of satiable agents. Since each agent's benefit function exhibits a satiation point, the environment can be described as a cooperative game with externalities. We show that the downstream incremental distribution is the unique distribution which both is fair according to the "aspiration welfare" principle and satisfies the non-cooperative core lower bounds. On the other hand, the cooperative core may be empty. Furthermore, the downstream incremental distribution satisfies all core lower bounds for all connected coalitions if and only if each agent's individual rationality constraint is independent of the behavior of the other agents.

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File URL: http://www.sciencedirect.com/science/article/pii/S0899-8256(07)00167-4
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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 64 (2008)
Issue (Month): 1 (September)
Pages: 35-50

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Handle: RePEc:eee:gamebe:v:64:y:2008:i:1:p:35-50
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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  1. Carlo Carraro & Carmen Marchiori & Alessandra Sgobbi, 2005. "Applications of Negotiation Theory to Water Issues," Working Papers 2005.65, Fondazione Eni Enrico Mattei.
  2. Greenberg, Joseph & Weber, Shlomo, 1986. "Strong tiebout equilibrium under restricted preferences domain," Journal of Economic Theory, Elsevier, vol. 38(1), pages 101-117, February.
  3. de Janvry, Alain & Sadoulet, Elisabeth & Winters, Paul C. & Murgai, Rinku, 2000. "Localized and Incomplete Mutual Insurance," Working Papers 12905, University of New England, School of Economics.
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  5. 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.
  6. Ambec, Stefan & Sprumont, Yves, 2002. "Sharing a River," Journal of Economic Theory, Elsevier, vol. 107(2), pages 453-462, December.
  7. Gabrielle Demange, 2004. "On Group Stability in Hierarchies and Networks," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 754-778, August.
  8. Serrano, Roberto & Clippel, Geoffroy de, 2005. "Marginal contributions and externalities in the value," UC3M Working papers. Economics we057339, Universidad Carlos III de Madrid. Departamento de Economía.
  9. Chander, Parkash & Tulkens, Henry, 1994. "The Core of an Economy With Multilateral Environmental Externalities," Working Papers 886, California Institute of Technology, Division of the Humanities and Social Sciences.
  10. 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.
  11. Navarro, Noemi, 2007. "Fair allocation in networks with externalities," Games and Economic Behavior, Elsevier, vol. 58(2), pages 354-364, February.
  12. 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.
  13. Hart, Sergiu & Kurz, Mordecai, 1983. "Endogenous Formation of Coalitions," Econometrica, Econometric Society, vol. 51(4), pages 1047-64, July.
  14. Young, Robert A. & Haveman, Robert H., 1985. "Economics of water resources: a survey," Handbook of Natural Resource and Energy Economics, in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 2, chapter 11, pages 465-529 Elsevier.
  15. Ni, Debing & Wang, Yuntong, 2007. "Sharing a polluted river," Games and Economic Behavior, Elsevier, vol. 60(1), pages 176-186, July.
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