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

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  • Alcalde-Unzu, Jorge
  • Gómez-Rúa, María
  • Molis, Elena

Abstract

The cleaning up of waste present in transboundary rivers, which requires the cooperation of different authorities, is a problematic issue, especially when responsibility for the discharge of the waste is not well-defined. Following Ni and Wang (2007) 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 responsibility 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

  • 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.
  • Handle: RePEc:eee:gamebe:v:90:y:2015:i:c:p:134-150
    DOI: 10.1016/j.geb.2015.02.008
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. René van den Brink & Simin He & Jia-Ping Huang, 2015. "Polluted River Problems and Games with a Permission Structure," Tinbergen Institute Discussion Papers 15-108/II, Tinbergen Institute.
    2. Bergantiños, Gustavo & Vidal-Puga, Juan, 2016. "One-way and two-way cost allocation in hub network problems," MPRA Paper 74875, University Library of Munich, Germany.
    3. Jorge Alcalde-Unzu & Maria Gomez-Rua & Elena Molis, 2018. "Allocating the costs of cleaning a river; estimating responsibilities versus incentive compatibility," ThE Papers 18/02, Department of Economic Theory and Economic History of the University of Granada..

    More about this item

    Keywords

    Cost allocation; Waste river; Responsibility; Characterization;

    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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