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Sharing a river among satiable agents

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  • Ambec, Stefan
  • Ehlers, Lars

Abstract

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.

Suggested Citation

  • Ambec, Stefan & Ehlers, Lars, 2008. "Sharing a river among satiable agents," Games and Economic Behavior, Elsevier, vol. 64(1), pages 35-50, September.
  • Handle: RePEc:eee:gamebe:v:64:y:2008:i:1:p:35-50
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. van den Brink, René & van der Laan, Gerard & Moes, Nigel, 2012. "Fair agreements for sharing international rivers with multiple springs and externalities," Journal of Environmental Economics and Management, Elsevier, vol. 63(3), pages 388-403.
    2. Borm, Peter & Ju, Yuan & Wettstein, David, 2015. "Rational bargaining in games with coalitional externalities," Journal of Economic Theory, Elsevier, vol. 157(C), pages 236-254.
    3. Cabo, Francisco & Tidball, Mabel, 2017. "Promotion of cooperation when benefits come in the future: A water transfer case," Resource and Energy Economics, Elsevier, vol. 47(C), pages 56-71.
    4. Ansink, Erik & Houba, Harold, 2012. "Market power in water markets," Journal of Environmental Economics and Management, Elsevier, vol. 64(2), pages 237-252.
    5. Ambec, Stefan & Dinar, Ariel & McKinney, Daene, 2013. "Water sharing agreements sustainable to reduced flows," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 639-655.
    6. Dinar, Ariel & Blankespoor, Brian & Dinar, Shlomi & Kurukulasuriya, Pradeep, 2010. "Does precipitation and runoff variability affect treaty cooperation between states sharing international bilateral rivers?," Ecological Economics, Elsevier, vol. 69(12), pages 2568-2581, October.
    7. Alcalde-Unzu, Jorge & Gómez-Rúa, María & Molis, Elena, 2015. "Sharing the costs of cleaning a river: the Upstream Responsibility rule," Games and Economic Behavior, Elsevier, vol. 90(C), pages 134-150.
    8. Wang, Yuntong, 2011. "Trading water along a river," Mathematical Social Sciences, Elsevier, vol. 61(2), pages 124-130, March.
    9. Cabo, Francisco & Erdlenbruch, Katrin & Tidball, Mabel, 2014. "Dynamic management of water transfer between two interconnected river basins," Resource and Energy Economics, Elsevier, vol. 37(C), pages 17-38.
    10. Dinar, Ariel & Blankespoor, Brian & Dinar, Shlomi & Kurukulasuriya, Pradeep, 2010. "The impact of water supply variability on treaty cooperation between international bilateral river basin riparian states," Policy Research Working Paper Series 5307, The World Bank.
    11. Kong, Wen & Knapp, Keith C., 2014. "Economic and Political Equilibrium for a Renewable Natural Resource with International Trade," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170591, Agricultural and Applied Economics Association.

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